West Africa has a mature, well developed oil and gas industry dating back over 50 years to the discovery of oil in the Niger Delta by Shell. Since then the region has never looked back; further finds followed across countries such as Cameroon, Ghana, Ivory Coast, and Mauritania, not to mention in OPEC heavyweights Nigeria and Angola. Immediately South, in Namibia, this hive of activity falls mysteriously quiet. All may be about to change, however, with several rigs expected to arrive in the country from the end of this year into 2012. With Petrobras and BP leading the charge, the race for first oil in Namibia has begun.
Namibia is a stable democracy, having achieved political independence from South Africa in 1990. According to the Economist Intelligence Unit, the country is allocated a BBB rating, ranking it on a par with South Africa and Brazil in terms of business risk. Historically, Namibia has been heavily dependant on its mining industry, with uranium, gold and diamonds all major contributors to total GDP. Meanwhile, the oil and gas sector barely registers. Earlier this year, The Ministry of Mines and Energy announced to the world the conclusion of a study which identified the potential for some 44 billion barrels of oil offshore, yet despite a vast exploration area of some 500,000km2 this virgin territory is almost completely unexplored. In fact, only 15 wells have ever been drilled, of which 8 were on the giant Kudu gas field discovered by Total in 1974, which remains undeveloped to this day. Compare this with its neighbour to the North, Angola, a country with a thriving oil industry and status as the second largest producer on the continent. According to Opec, Angola has proven reserves of some 9.5 billion barrels of oil, 11 TCF of gas and an output of 1.7m barrels per day. With several notable discoveries in West Africa over the last few years, such as the Jubilee field in Ghana, the relative inactivity in Namibia seems puzzling.
A major reason for a lack of exploration thus far is the significant challenge presented by the depths at which prospective resources exist offshore. For example, potential targets in the Walvis and Orange basins lie over two thousand metres below sea level. Much of Angola’s production comes from shallow water blocks, in depths of less than five hundred metres. This initial success and resultant investment in infrastructure…
