BP Namibia: Assumes PEL97, PEL99, PEL100 Operatorship After Approvals

• BP Namibia Energy has officially taken over operatorship of three offshore petroleum licenses, PEL97, PEL99, and PEL100, in Namibia's Walvis Basin.
• The transfer involved Eco Atlantic ceding a 60% stake to BP, following final approval from the Ministry of Industries, Mines and Energy.
• Eco Atlantic retains a 25% interest, Namcor holds 10%, and local partners hold 5% in each license.
• BP will cover Eco Atlantic's, Namcor's, and local partners' exploration costs during the current renewal period, and Eco Atlantic will receive a US$2.7 million payment.
• A large-scale 3D seismic survey covering at least 3,000 square kilometers across PEL99 and PEL100 is the next immediate exploration step.

Namibia's offshore acreage has now attracted another prominent International Oil Company operator, underscoring the growing global interest in the region's prospective resources.

BP Namibia Energy, a subsidiary of the British energy giant BP, has officially assumed operatorship of three key offshore petroleum licenses in Namibia. This significant development follows the finalization of government approvals, paving the way for BP to lead exploration activities in PEL97, PEL99, and PEL100.

The transfer involved Eco (Atlantic) Oil & Gas ceding a 60% interest in these Namibian offshore exploration licenses to BP. The Ministry of Industries, Mines and Energy provided the necessary ministerial signatures, confirming the deal. These licenses are situated within the Walvis Basin, an area of increasing interest for offshore exploration.

Following the transaction, Eco Atlantic retains a 25% stake in each license, while the National Petroleum Corporation of Namibia (Namcor) holds 10%. The remaining 5% in each block is held by local partners, solidifying the Namcor BP partnership in these blocks.

The agreement outlines specific financial arrangements designed to support the ongoing exploration efforts. BP will bear Eco Atlantic's share of exploration costs during the current renewal period, effectively allowing Eco Atlantic to maintain its 25% ownership without direct funding for this phase. Furthermore, BP is also responsible for covering the proportional costs associated with Namcor's 10% interest and the combined 5% held by local partners.

This structure significantly reduces Eco Atlantic's financial exposure while ensuring its continued participation in potential future discoveries. As part of the arrangement, Eco Atlantic is slated to receive a one-off payment of US$2.7 million, equivalent to approximately N$44.7 million, this week.

The Eco Atlantic BP Namibia deal also includes provisions for future options when the licenses reach their next renewal stage in 2028. Should BP and its partners opt to proceed into a second renewal period and commit to drilling an exploration well, Eco Atlantic will face a choice: either transfer an additional 10% stake to BP, with BP then covering drilling costs on Eco Atlantic's remaining 15% interest up to US$21 million per well per license, or retain its full 25% interest and contribute to drilling costs, potentially by seeking another funding partner.

With BP now at the helm of the BP Namibia PEL97 PEL99 PEL100 operatorship, the immediate next step involves a substantial three-dimensional seismic survey. This survey is planned to cover at least 3,000 square kilometers across PEL99 and PEL100, utilizing sound waves to map underground rock formations and identify potential hydrocarbon reservoirs. Preparations for this extensive program are already in progress, with the commencement of work anticipated in the coming weeks.

The approved exploration agenda also includes further processing of existing seismic data pertinent to PEL97. Gil Holzman, CEO of Eco Atlantic, characterized the completion of this transaction as a pivotal achievement for both his company and Namibia's burgeoning oil industry. He emphasized that Namibia's offshore acreage has now attracted another prominent International Oil Company operator, underscoring the growing global interest in the region's prospective resources.

Holzman also acknowledged the professionalism and collaborative approach demonstrated by the Namibian government, specifically the Ministry of Industries, Mines and Energy, and the Upstream Petroleum Unit, in facilitating the necessary Namibia petroleum licenses transfer approvals.

This transaction signals a significant increase in offshore oil and gas exploration activity in Namibia, driven by a major international player. Lawyers and compliance officers should anticipate a rise in related regulatory filings, environmental impact assessments, contractual negotiations for service providers, and potential for future M&A or financing deals in the Namibian energy sector.

Source: Original reporting via Eco Atlantic's announcement