THE search for oil offshore Walvis Bay has suffered consecutive setbacks over the past month after two of the exploratory wells drilled by two different operators both failed to produce the goods and had to be plugged.
The group led by Tullow Oil said they spent about US$5 million to drill the Cormorant-1 deep-water exploration well in the PEL-37 license area to a depth of 3,855 metres, where they found “non-commercial hydrocarbons”, following which the well was plugged and abandoned.
Tullow is the main operator of the PEL-37 license and holds a 35 percent stake, along with ONGC Videsh (30 percent), Pancontinental Oil & Gas (30 percent) and Namibian partner Paragon (5 percent).
Admitting that “this is not the outcome that we had hoped for,” Angus McCoss, the exploration director of Tullow Oil, said: “The Cormorant-1 frontier exploration well was a bold attempt to open a new oil play in this area of Tullow’s offshore Namibia acreage.
“Gas readings while drilling continue to support the concept that there is a working oil system in the area. As a result, following the conclusion of operations, we will analyse the data gathered before deciding on any future activity.”
The Ocean Rig Poseidon drillship used by Tullow was also contracted to spud a new well a few days later on the central license block operated by the exploration company, Chariot Oil & Gas, which held a 65 percent stake in the operation. Chariot’s share price took a pounding though after it announced last week that the well would be plugged and abandoned. They had drilled to a depth of 4,165 metres to penetrate the turbidite reservoir sands, but “the reservoirs were water-bearing”, with its stock price – which had stood at 23 pence in January – dropping to 2.80 pence by Monday.
Chariot’s main local investor is Protech Namibia, which has company director Heindrich Ndume listed as its sole shareholder with 5.5%. Other partners on the well exploration project included Azinam (20 percent), NAMCOR (10 percent) and Ignitus (5 percent).
The company said the data collected will be used to better understand the implications of the well results on the overall prospectivity of the surrounding area.
In a statement to the market, CEO Larry Bottomley said: “Whilst very disappointing that we have not established a hydrocarbon accumulation in the prospect, we have learned valuable information about the reservoir potential of these turbidite systems which form the primary targets across many of the prospects within the Central Blocks portfolio. We will further evaluate the extensive data gathered in the well to understand the implications for the central blocks portfolio.”
Chariot Oil & Gas Limited holds licenses covering two blocks in Namibia, three blocks in Morocco and four blocks in the Barreirinhas Basin offshore Brazil, all of which are currently in the exploration phase.
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