Exxon Tries to Put the Worst Behind it With $20 Billion Writedown
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March 12 (Bloomberg) — Repsol SA, Spain’s biggest oil producer, will spend about $95 million drilling its first well offshore from Namibia as the African nation pursues a commercial discovery, the country’s petroleum commissioner said.
Repsol, which has a 44 percent interest in offshore license 0010, is operator of Block 1911 where the Welwitschia-1 well will be drilled next month, Petroleum Commissioner Immanuel Mulunga said in a phone interview today. Repsol will drill wells all along the west coast of Africa this year, said Kristian Rix, a spokesman for the Madrid-based company.
“It’s a tremendous risk they are taking and one that raises hope for us,” said Mulunga. “It’s a risk worth undertaking as we believe this block has oil.”
Namibia has attracted attention from the world’s biggest oil companies even after at least 18 wells failed to find commercial deposits of crude. Explorers such as BP Plc and Chariot Oil & Gas Ltd. have snapped up assets on a bet that the nation’s coastal shelf may mirror that of Brazil across the Atlantic, while Royal Dutch Shell Plc announced last month it was taking over two exploration blocks in the Orange Basin.
“The fact that Brazil and Africa were once joined years ago gives us that expectation,” said Mulunga. “On the African side, there are discoveries in Angola and Gabon, and we expect there is oil in Namibia’s part of west Africa margin.”
In 2013, 11 out of the top 20 oil and gas discoveries in the world were made in Africa, according to Jan. 29 presentation by Repsol.
Tower Resources holds 30 percent of license 0010 in the Walvis Basin, 200 kilometers (124 miles) north of HRT Participacoes em Petroleo SA’s Wingat well, where a sub- commercial discovery was announced last May. A drillship is expected to start operations at Welwitschia-1 on April 11, Tower Resources said on March 5.
Namibia has also granted permission to U.S.- based Murphy Oil Corp. to explore two blocks in the Luderitz Basin, Mulunga said. Murphy, which holds 40 percent in the blocks and is also the operator, is expected to start drilling in 2015 or 2016, he said.
“International companies still have faith in Namibia’s oil potential,” he said. “They also believe we are doing a good job in terms of regulating the industry.”
The West African country also has attracted Tullow Oil Plc and Total SA as explorers move along Africa’s Atlantic coastline after making discoveries in Ghana, Sierra Leone and Ivory Coast.
Namibia’s only known commercial discovery is the Kudu gas fields, offshore from southern Namibia, which will supply a planned 800 megawatt power plant.
– Felix Njini, Copyright 2014 Bloomberg.
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