BW Raises Stake in Namibia's Kudu Field
Norway's BW Energy has reached a deal to raise its stake in the 1974 Kudu gas discovery off the coast of Namibia, the company said on January 13, in a rare sign of progress at the long-delayed project.
BW is set to acquire a 39% interest in the Kudu licence from National Petroleum Corporation of Namibia (Namcor), raising its total interest to 95%. Namcor will retain the remaining 5% and will be able to obtain an additional 5% when Kudu reaches first gas. BW will pay Namcor $4mn when the deal is completed and carry Namcor's share of development costs.
Kudu has had several operators in the decades since its discovery, including Chevron, Shell and Tullow Oil, which drilled eight exploration and appraisal wells between 1974 and 2014, but development has been delayed repeatedly. Namibia wants to use the field, nearly 37bn m3 in size, to generate gas-fired electricity for supply in Namibia and across southwest Africa. The country currently relies on imported coal power.
The share transaction clears a path to arranging gas sales and increases the likelihood that the project will secure financing, BW said. "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," CEO Carl Arnet said.
BW's managing director Immanuel Mulunga said Kudu could become the first ever oil and gas development to come on stream off Namibia,
"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," he said. "I am confident this development will inspire increased exploration initiatives in other licence areas in the country."
Furthermore, insights gained at Kudu could be used to unlocked similar stranded gas reserves across the world, according to Arnet. "Adding cost efficient gas to the energy mix of tomorrow is going to be vital to reach the world's environmental targets," he said.