NAMIBIA, PRACTICALLY UNEXPLORED, MAY HAVE LAND, OFFSHORE POTENTIAL

M.P.R. Light
Intera ECL Petroleum Technologies
Henley-on-Thames, U.K.

H. Shimutwikeni
National Petroleum Corp. of Namibia
Windhoek, Namibia

Namibia became an independent nation in March 1990.

Lying in southwestern Africa, it has an onshore area of 823,144 sq km with a coastline some 1,400 km long (Figs. 1, 2).

The offshore area, out to the 1,000 m isobath, is 240,000 sq km. This is equal to the combined offshore areas of Gabon, Congo, Zaire, and Angola.

The hydrocarbon potential of this vast region is virtually unexplored because of political uncertainties that affected the country in the years until independence. Now, however, the country has a democratically elected government, political stability, and a positive and realistic attitude towards foreign investment.

The authors describe the recently enacted petroleum legislation, taxation system, and hydrocarbon potential of Namibia. A licensing round (both offshore and onshore) has just been announced and will close Nov. 1, 1991. The new onshore and offshore blocks are shown.

Through the activities of Namcor, the national petroleum corporation, and Intera ECL, Namibia is emerging as one of the few remaining countries of the world where truly giant fields could be found.

LEGISLATION, TAXATION

The Namibian government has formulated a national energy policy and intends to assume an active role in encouraging foreign investment in hydrocarbon exploration and production as well as in other sectors of the economy.

In 1991 the Petroleum (Exploration and Production) Act was ratified. The licensing regime is summarized (see table).

The principal elements of the Petroleum Taxation Act are a legislated royalty (negotiable for marginal fields), an income tax, and a three tier, partially negotiable additional profits tax (APT).

These are the only amounts payable to the state out of the proceeds of the sale of oil. The government of Namibia requires no signature, levy, production, or bonus payments.

The Namibian profit sharing contract provides good investment incentives compared with many other contractual terms available internationally.

A model Petroleum Agreement has also been enacted and will constitute a basis for negotiations on matters of detail not included in the principal acts. This is in line with modern practices elsewhere in the developing world.

EXPLORATION HISTORY

The first prospecting grant was awarded to Etosha Petroleum Co. (Pty.) Ltd. in 1959 for the northern land area.

Offshore leases were issued in 1968 and 1972. Political and legal uncertainties over Namibia's international status hampered the petroleum exploration programs of foreign companies in pre-independence times.

However, in 1973 a joint operation involving Chevron, Regent, and Soekor led to a potential gas discovery, Kudu 9A-1, in the Orange basin (Fig. 2).

By 1975 some 33,000 line km of seismic data had been acquired off Namibia, but only one well had been drilled.

A United Nations mandate in 1976 voided all concessions granted to foreign companies by the government of South Africa.

For the next 1 0 years there was virtually no oil or gas activity until in 1987 and 1988 two more wells, Kudu 9A-2 and 9A-3, were drilled for Namcor. The latter successfully tested 9 MMscfd and 38 MMscfd of dry gas from Lower Cretaceous sandstones at about 4,300 m.

Interpretation of recent seismic data indicates that a very sizeable stratigraphic gas accumulation (5-50 tcf in place) could be present but requires additional seismic and more drilling to define its limits.

Namcor intends to start an independent study of the economic viability of the field. Provisional estimates suggest Kudu gas field could fuel a 2 million kw power station or the gas could be converted to some 40,000-50,000 b/d of liquid fuel.

In 1989 Intera, ECL, and Halliburton Geophysical Services Inc. shot a 10,600 line km regional speculative seismic survey off Namibia. Following the interpretation of this data they are conducting an infill survey of some 3,500 line km.

Additionally, 5,000 line km of old seismic data have been scanned and migrated to provide greater control.

Onshore, Intera ECL recently completed a comprehensive analysis of the petroleum potential of the Pan-African and Karoo basins.

LAND GEOLOGY

Two Pan-African "successor basins" are present in Namibia.

They are the Etosha basin in the north and the Nama basin complex in the southeast (Fig. 2).

The Etosha basin is largely covered by the Etosha Petroleum concession, now operated by Overseas Petroleum Investment Corp., Taiwan. New seismic data have recently been acquired in this area.

Oil seeps and a gas blowout are evidence of the petroleum potential of the Nama basin.

Apart from some 300 line km of old seismic data and a few scattered wells, the Nama basin remains a virtually unexplored area of some 200,000 sq km.

OFFSHORE BASINS

An interpretation of Intera ECL's 1989 seismic, gravity, and magnetic surveys has been integrated into a model of the regional tectonostratigraphic and geological development of Gondwanaland as far back as the Permian (Figs. 3, 4).

The geological history encompasses a passive "Basin and Range" phase and two active rifting phases, succeeded by passive margin development during the early Cretaceous opening of the South Atlantic.

Schematically, the passive margin consists of an Eastern Graben province separated from a more extensive Central Half Graben by a Medial hinge line.

This hinge line forms a potential major subcrop seal to the east for all sequences below the Hauterivian-Barremian unconformity (Horizon Q).

The Marginal Ridge bounds the Central Half Graben in the west.

The offshore area can be subdivided into four main basins (Fig. 2). From south to north they are:

Orange basin, which contains oil plays in a series of Jurassic grabens to the east and gas fields to the west.
Luderitz and Walvis basins, both undrilled but having potential for large plays.
Namibe basin north of the Walvis ridge, which is more analogous to the Angola basin.

SOURCE ROCKS, MATURITY

Thick sequences of sapropelic (type 11) Aptian and Albian source rocks have been penetrated at Deep Sea Drilling Project sites north and south of the Walvis ridge, whereas excellent Cenomanian-Turonian source rocks are present to the north.

In the Kudu wells Aptian source rocks, though now at a high state of maturity, were probably originally a good oil source.

Source rocks off Namibia are expected to become more sapropelic away from the Orange basin, In the latter area, they have been somewhat diluted by terrigenous organic material introduced by the paleo-Orange River.

In addition to the DSDP and Kudu occurrences, thick oil prone source rocks of Permian, Late Jurassic, and Cretaceous age are found both south and north of the Namibian offshore region.

They have sourced oil in the A-J1 well east of the Orange basin, on the Agulhas bank, and in the Angola basin north of the Walvis ridge. Thus, thick oil prone source rocks are likely to be present offshore Namibia in the undrilled basins.

RESERVOIRS, SEALS

Excellent clastic reservoir rocks of Permian (deltaic) and Triassic age (aeolian) occur onshore Namibia.

Early Cretaceous aeolian sands form the reservoir at the Kudu wells in the Orange basin. Furthermore, deep marine sand accumulations north and south of the Walvis ridge have potential for large turbidite plays similar to Namorado field in the Campos basin, Brazil.

The major Late Cretaceous deltaic sequences in the Orange basin are also expected to contain good sandstone reservoirs. Widespread thick shale beds, developed during periods of oceanic high stand, form regional seals that are most effective west of the Medial hinge line.

Stratigraphic seals are expected in fluvial, deltaic, and deep marine systems, and an extensive unconformity seal may extend up the whole Namibian offshore along the hinge line.

PLAYS, TYPES

Plays recognized off Namibia fall into five main categories:

Large anticlinal dip closures within the Walvis, Luderitz, and Namibe basins.
Structural and stratigraphic traps within the Jurassic-Lower Cretaceous lacustrine and non-marine sequences of the Eastern Graben province.
Stratigraphic (subcrop and onlap) traps along the western flank of the Medial hinge line.
Deep marine, turbidite mound, and toe slope sand accumulations north and south of the Walvis ridge with stratigraphic updip seals.
Structural accumulations in deltaic post-rift sequences of the Walvis and Orange basins.

POTENTIAL ACCUMULATIONS

Well control off Namibia is restricted to the three Kudu wells in the Orange basin, but geological and geophysical studies have demonstrated that offshore Namibia has the potential for large oil and gas accumulations.

Some 58 structural and stratigraphic leads have been identified. The combined potential hydrocarbons in place calculated for these leads using conservative porosity, oil saturation, and sand-shale ratios, is 100 billion bbl of oil.

Based on the fiscal terms outlined in the table, a 200 million bbl discovery in 200 m of water, developed at a present day cost of $400 million and with a field life of 20 years, has a net present value at 15% of $1.80/bbl. This assumes a present day oil price of $18/bbl and all costs and prices escalated 5%/year.

CONCLUSION

Integrated studies onshore and off Namibia indicate excellent potential for giant hydrocarbon accumulations.

Unequivocal evidence supporting this prospectivity is provided by the gas discovery at Kudu in the Orange basin and the oil and gas indications onshore in southern Namibia.