Block1711 now has oil and gas

THE treasure hunt for oil and gas along the Namibian coast appears to be heating up as Mines and Energy Minister Erkki Nghimtina found it opportune to announce in Parliament yesterday that the much-touted offshore Block 1711 could contain not only oil but ‘potential gas resources of up to 14 trillion cubic feet.’

The 1711 Block is in the Atlantic Ocean close to the Kunene River mouth and has changed hands many times and landed in the lap of Russian oil company Sintezneftegaz about three years ago, which contracted drilling companies like Russia’s PetroAlliance in April 2008. The Minister did not say so, but Block 1711 would have far more gas reserves than the still unexplored offshore Kudu gas field along Namibia’s southern coastline, which is said to have nine trillion cubic feet. ‘The geological analysis of the preliminary results of drilling activities to a depth of 5 052 metres below sea level in Block 1711 indicates to oil and gas potential as well as good prospects for the region as whole,’ Minister Nghimtina told Members.However, he noted that ‘It was not possible to fully evaluate the hydro carbon potential of the penetrated section due to operational problems during testing.’The reservoir quality of oil and gas ‘was not very good’, the Minister added, due to ‘igneous activity.’ This expression means the emplacement (intrusion) of molten rock material (magma) into material in the Earth’s crust.Despite this underground activity, the changes in the sediments that were brought about as a result showed that there was ‘great potential’ near the completed drilling area. ‘PetroAlliance estimates that the interval between the depths of 4 698 down to 4 748 metres below the ocean could contain a potential gas resource of up to 14 trillion cubic feet,’ according to Nghimtina. Despite the global economic meltdown, Sintezneftegaz and its partners had met their ‘minimum work commitments under their license under often very difficult conditions.’’It is anticipated that exploration activities will continue with the view to establishing more accurately the quantities and commerciality of the hydro carbons in Block 1711,’ the Minister concluded his ministerial statement. Back in March 2006, Sintezneftegaz took on board local partners such as Energulf Namibia, the Namibian Petroleum Cooperation (Namcor), PetroSA, and Kunene Energy to sign a petroleum agreement with the Mines and Energy Ministry. Sintezneftegaz has a 70 per cent stake in Block 1711, Energulf 10 per cent, PetroSA 10 per cent, Namcor seven per cent and Kunene Energy holds three per cent. Kunene Energy belongs to Namibian businessman Knowledge Katti, who also has several stakes in offshore drilling blocks near Kudu gas via a network of several companies. He sold some of them recently to Canada’s Universal Power Corporation, cashing in about US$2 million (about N$16 million).However the Russians have also cast their eyes on Kudu gas. It is believed the current exploration license for Kudu is running out by the end of next month. GazpromBank of Russia signed a US$20 million deal with Namcor last month while Russian President Dmitri Medvedev visited Namibia. GazpromBank announced on its website it would help Namibia develop the Kudu gas field after discussions were held between the two parties during the state visit. Local power utility NamPower, which is the Government-appointed developer of Kudu gas, felt left out and reacted with advertisements placed in State media.’The development of the Kudu gas field is the responsibility of the upstream partners, namely Tullow Oil, Itochu and Namcor. NamPower’s responsibility in the Kudu project is the development of the gas-fired power station. NamPower is not in any way involved in any upstream development apart from negotiating for the gas supply agreement with the upstream partners,’ the advertisement said.