BP Completes Transfer of Interests in Three Offshore Exploration Blocks in Namibia

en.Wedoany.com Reported - On November 9, Namibia's Minister of Industrialisation, Mines and Energy signed the transfer of interest, transfer of rights and renewal documents for three offshore petroleum exploration licences, completing the final government approval procedures for the transfer of a 60% participating interest in three offshore exploration blocks in Namibia from Canada's Eco Atlantic Oil & Gas to the UK's BP. BP's subsidiary BP Namibia Energy Ltd formally acquired operatorship of the three blocks. The transaction had previously received the Namibian government's transfer consent under Section 11 of the Petroleum (Exploration and Production) Act on October 1, and was completed upon signature of the documents on November 9.

The transaction involves three licences: PEL97 Cooper Block (Block 2012A), PEL99 Guy Block (Blocks 2111B and 2211A), and PEL100 Tamar Block (Blocks 2211B and 2311A). Following completion, the interest structure across the three blocks is uniformly BP 60%, Eco Atlantic 25%, Namibia's national oil company NAMCOR 10%, and local partners 5%. The local partners are Tangi Trading Enterprise for PEL97, Lotus Exploration for PEL99, and Moonshade Investments for PEL100.

The cash consideration for the transaction is US$2.7 million, which Eco Atlantic expects to receive as a lump-sum payment on November 16. In addition to the cash payment, BP will also carry all exploration costs corresponding to Eco's retained 25% participating interest during the first exploration renewal period, as well as the costs corresponding to NAMCOR's and the local partners' interests under the agreement. Eco thereby retains a 25% interest in the three blocks but is not required to bear the corresponding exploration funding expenditure at the current stage under this arrangement. The cash proceeds from the transaction will be used for Eco's other exploration and appraisal activities in the Atlantic Margin region and for general working capital.

The first-phase exploration work programme approved by the Namibian government comprises two types of operations: reprocessing of existing seismic data on PEL97, and acquisition of at least 3,000 square kilometres of 3D seismic data on PEL99 and PEL100. The joint venture partners are currently preparing for the seismic acquisition operations, which are expected to commence in the coming weeks. BP will act as operator for all three licences, and subsequent exploration work will be carried out in accordance with the renewal plans for each block.

The transaction agreement also includes an option for interest adjustment at the second exploration renewal period in 2028. If BP and its partners decide to enter that phase and commit to drilling exploration wells, Eco may elect to transfer a further 10% participating interest to BP in exchange for BP bearing the drilling costs corresponding to its remaining 15% interest, with a cost cap of US$21 million per licence per well, and a maximum of US$63 million if exercised across all three licences. Eco may also retain its 25% interest and bear the corresponding drilling costs itself, or introduce a qualified new partner.