Rumours that oil has been struck off the shore of Walvis Bay
Despite much speculation among shareholders and local residents about the prospect of striking oil at the Welwitchia-1 well, which is being drilled in the Atlantic Ocean some 200km west of , there is as yet no clear sign of any significant find.
Repsol Exploration Namibia is the operator of license block 10. At the start of drilling operations, its parent company, Repsol SA, which is Spain’s biggest oil producer, made it clear that during drilling there would be no updates to the market, as this well is classified as a “tight hole”.
Drilling started on the Welwitschia-1 well on 23 April and the results are expected to be known by 8 June.
The operators announced early on that they aim to drill to a total depth of 3 000 metres and that it would take 46 days to reach the targeted depth. Repsol will reportedly spend US$95 million (N$1 000 445 000) drilling its first well offshore Namibia. The Rowan Renaissance Drillship is chartered by Repsol at a day-rate of US$619 000.
Graeme Thomson, the CEO of Tower Resources, which holds a 30% stake in license block 10, said at the start of drilling operations: “We are very excited that the high potential Welwitschia well is to commence drilling.”
Data source LSE
Yet, despite much optimism around a potential discovery, Tower’s share price on the London Stock Exchange was on a downward slope this week, and fell from a high of 6.05 British pence early in March down to 3.13 pence on Monday. At the time drilling operations first commenced towards the end of April, Tower’s shares were priced at around 4 pence.
Meanwhile, several other major oil firms with a stake in ongoing exploration offshore Namibia are watching developments with hawk-eyes. In recent months several oil and gas majors, including GALP Energia, BP and Shell have bought into exploration license blocks offshore Namibia, and Brazil’s HRT looks set to make a return for further drilling on its Meerkat prospect in 2015, in what has been described as “the last frontier of oil and gas discovery”.
In April, Austria’s largest oil and gas company, OMV, acquired a 65% interest in two Namibian exploration blocks of Cowan Petroleum of Brazil through Murphy Lüderitz Oil Company. Any results from Welwitchia 1 – whether positive or negative – will likely have an impact on the prospects of other oil explorers’ waiting in the wings to strike black gold.
Meanwhile, the ongoing exploration will be a key discussion point at the Mining Conference, which starts in Windhoek on Thursday. Namibia’s second International Oil and Gas Conference will take place from 17 to 19 September under the theme ‘Unlocking and Optimising Our Resource Potential’, and will focus on exploration, energy and investment.
http://www.namibtimes.net/forum/topics/all-eyes-on-welwitchia-1
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