S03 ORA 5 2020 Southern Africa report_ORA Master Template - 2016 New 21/10/2020 14:15 Page 11
G EOG RAPH ICAL FOCUS
ISSUE 5 2020 • WWW.OILREVIEWAFRICA.COM
11
BIG OIL BETS
ON SOUTHERN AFRICA Major developments over the past 15 years open up viable possibilities in underexplored regions. When it comes to finding promising frontiers for oil and natural gas exploration drilling, international oil companies (IOCs) and juniors are investing in exploration and development (E&D) programmes across southern Africa, with a bigger risk appetite.
HERE IS NOWHERE on Earth with as much potential as Africa,” said Jay Park, CEO of the UKbased Reconnaissance Energy Africa (ReconAfrica). The value of subsoil resources in Africa is estimated at US$60,000 per square mile, compared to about US$300,000 in OECD countries. “This is either because Africa doesn’t have its fair share of the world’s resources, or because it hasn’t found those resources yet. I’d put money on the latter because Africa is vastly underexplored compared to the rest of the world,” said Park. Between 2011 and 2014, Africa accounted for one-fifth and 45%, respectively, of global oil and gas discoveries (International Energy Agency). The IEA estimated remaining technically recoverable oil and gas resources in Africa at 450bn barrels and 100 trillion cubic metres, representing 7% and 13% of global total resources.”
“T
Newest radar for explorers The potential riches of southern Africa have yet to be unraveled, off Namibia and South Africa. The geological formations are dominated by ancient sediments, underlay by basement. There are evidence of oil prone source rocks, reservoirs and subsalt
Image Credit: NJ/Adobe Stock
Namibia could be the next ‘big find,’ with exciting potential in numerous sites.
potential in the untapped ‘southern tier.’ Namibia could be the next ‘big find’ on scale of the US shale boom, with exciting potential in numerous sites, especially the deep/onshore Kavango basin – bigger in territory than shale basin (Eagle Ford) that transformed US into a top oilproducer. It is believed to be an extension of South Africa’s 600,000km Karoo sedimentary basin, home to Shell’s vast Whitehill Permian shale play (estimated reserves: 211 tcf). “Nowhere in the world is there a sedimentary basin this deep that does not produce commercial hydrocarbons,” commented Bill Cathey, president
at Earthfield Technologies (Houston). One of the leading geochemists and shale sector pioneers, Dan Jarvie of Worldwide Geochemistry reckons there is potential for 120bn barrels of oil equivalent (boe) in the Kavango basin waiting to be proved up to technical recovery – contingent, however, on massive E&D investments. ReconAfrica has acquired the entire 8.75mn-acre sedimentary basin and exclusive rights to estimated 18.2bn barrels of oilin-place – including Recon’s Botswana portion of the basin. It holds a 90% interest (the government owns 10%) under a four-year E&D license, plus a 25-
year exploitation permit once commerical discovery is made. Besides good geology, Namibia offers favourable fiscal terms – 5% royalty fees and corporate tax (35%) on oil reserve profits. Even ExxonMobil has acquired seven million net acres in Namibia from the government for a block about 135 miles offshore in water depths up to 13,000 feet. The supermajor’s big bet on Namibia factors that it comprises similar geology as Brazil’s pre-salt oil basins (Santos and Campos), which have already proven tangibly resource-rich according to industry experts. South Africa’s offshore areas of Orange and Outeniqua basins are believed to be hydrocarbons
