A wholly-owned subsidiary of BW Energy, BW Kudu, and the National Petroleum Corporation of Namibia (NAMCOR) have signed a Farm-In and Carry Agreement. The agreement increases BW Kudu’s working interest in the Kudu license from 56% to 95%. NAMCOR retains the remaining 5% working interest.
The agreement is subject to the approvals of BW Kudu and NAMCOR’s Boards, and Namibian regulatory authorities. NAMCOR will acquire an additional 5% working interest post first gas, while BW Kudu will pay $4 million upon completion of the transaction and carry NAMCOR’s share of development costs until first gas.
The Kudu gas field is located about 130 kilometres offshore the southern parts of Namibia. It was discovered in 1974 and estimated to have 1.3 TCF of gas. The new agreement will enable gas sales arrangements and increase the chances of securing financing for Kudu development.
The Chief Executive Officer of BW Energy, Carl K. Arnet, said: “Kudu gas is an important project for the energy sector and for Namibia. It has the potential to provide a valuable contribution to Namibia’s energy mix and local value creation by monetizing stranded gas which is an untapped natural resource in Namibia. The next step for the Kudu joint venture will be to secure long-term commercial gas sales agreements, update the development plan to meet offtake needs and ensure robust financial project returns.”
“Developing Kudu will provide insights which can be used to unlock similar abundant stranded gas reserves available around the world. Adding cost efficient gas to the energy mix of tomorrow is going to be vital to reach the world’s environmental targets.”
The Managing Director of NAMCOR, Immanuel Mulunga, said: “It represents an opportunity to reduce carbon emissions and strengthen energy independence for Namibia, which currently imports a major part of its electricity from coal fired power plants outside of the country. I am confident this development will inspire increased exploration initiatives in other licence areas in the country.”