Petroleum Africa
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Wednesday, February 8, 2017
BW Offshore has picked up a stake in Namibia’s offshore acreage through its wholly owned subsidiary BW Kudu Ltd. The company entered into a farm-out agreement which gains it a 56% stake in the Kudu license offshore Namibia.
BW Kudu will be operator of the Kudu license and is partnered with state-run firm NAMCOR who holds the remaining 44% of the license. BW Kudu will pay for past costs upon transfer of the field interest to the company. The FID is planned for Q4 2017.
BW Offshore “will now start the work with the Namibian government, NAMCOR, NamPower (the Namibian power utility), large infrastructure investors and other stakeholders to get this very exciting project to FID” said Carl K. Arnet, CEO of BW Offshore.
The Kudu license is home to the Kudu natural gas field which was discovered over more than four decades ago. Various companies have held stakes in the license, including Tullow Oil, over the past decade or so. Despite the number of firms attracted to its more than 1 Tcf of gas, development of the field’s resources has stalled over the years as funding for the project has faltered.
In more recent years the field has been tagged to aid in powering Namibia and the Kudu Gas-to-Power project landed on the drawing board. The project calls for gas to be produced by a FPU before being exported by pipeline to a new 885 MW gas-to-power plant onshore Namibia.
“Kudu represents another opportunity for BW Offshore to take a proactive development role in a project that will produce for 15-25 years. Falling development costs after the 2014 drop in oil prices has helped in making the project economically feasible. The electricity generated by the power station will reshape electricity supply in south-western Africa, providing a secure long-term supply to support the development of Namibia and potentially neighboring countries,” added Arnet.
NAMCOR’s Managing Director Immanuel Mulunga said the project will play a fundamental role in shaping the energy dynamics of Namibia. “The Kudu Gas-to-Power Project is a key strategic power generation project for Namibia, which will significantly reduce reliance on imported power while at the same time accelerating economic development.” He further remarked that the project has the potential of strengthening Namibia’s international standing: “The Kudu Gas to Power Project will not only enable Namibia to entirely cater for its own power needs but become a net exporter of power to regional markets.”
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