Oranto's Farm-Out To Test Investor Sentiment
BMI View: Oranto Petroleum is offering a stake in two blocks offshore Namibia. We believe this farm - out will be a good test of investor sentiment toward the country. While the geographical features of Namibia promise large potential, we outline numerous above - ground and below - ground risks that could impair further exploration in the country.
Interest in Namibia has grown alongside an industry rush into countries lying along the West Africa n coast in hope of replicating subsalt discoveries made in South America. This is backed by the continental drift theory, which posits that the coastal areas of South America and West Africa exhibit similar geological characteristics - and thus hydrocarbons potential. Namibia also benefits from close proximity with Africa's second largest crude producer, Angola.
Despite booming interest in the region, Namibia is at present a highly frontier play, with no existing crude production. We nonetheless emphasise that we are currently seeing an acceleration of exploration in the country. In early May, Oranto Petroleum, a West African exploration and production (E&P) specialist based in Nigeria, proceeded to farm-out its 2011B/2111A Permit, formerly referred to as the Ondjou Block, in the Walvis Basin. This follows closely the last deal signed by Brazil-based independent HRT in November 2012, which sold a 14% stake in three offshore leases to Galp Energia in order to jointly explore and develop them (see our online service, November 26 2012, 'Fiscal Threat To Frontier Take-Off').
|Countries Along The Coastlines Of The Continental Drift Theory|