Namcor, ReconAfrica team up in oil hunt
THE national corporation tasked to commercialise Namibia’s hydrocarbon resources, Namcor, and the Canadian company that has already proven the existence of oil in northeastern Namibia, have entered into a Joint Operating Agreement (JOA) to develop the resource potential of the Kavango Sedimentary Basin. Under their Petroleum Agreement with the Namibian government, ReconAfrica and Namcor would potentially activate a 25-year production licence if the exploratory drilling programme proves the Kavango Sedimentary Basin is commercially viable.
The JOA was officially executed on Friday, 11 June 2021 and signed by ReconAfrica CEO Scot Evans and Namcor Managing Director Immanuel Mulunga.
The agreement stipulates that the two companies will jointly pursue their ongoing petroleum exploration programme in the Kavango East and Kavango West regions, with ReconAfrica covering the full costs to commerciality. The two companies initially entered into a Petroleum Exploration Agreement with the Namibian government in 2015, under which they acquired Petroleum Licence No. 73.
“We are delighted to have finalised the negotiations and signature of a Joint Operating Agreement with ReconAfrica for Petroleum Exploration Licence No. 73. This agreement will govern the relationship between Namcor and ReconAfrica and we will collectively advance the search for oil in the Kavango Sedimentary Basin in accordance with the laws of Namibia. We understand the hydrocarbon potential of the Kavango Basin, hence collaborating with an international company with both technical and financial capabilities such as ReconAfrica will unlock the discovery of commercially viable hydrocarbon reserves and thereby enhance economic development in the country,” said Mulunga.
“We’re pleased to finalise this operating agreement, which solidifies our partnership with Namcor. We look forward to working with Namcor as we jointly endeavour to unlock the potential of Namibia’s vast national resources, providing jobs, economic growth and long-term responsible resource development - which includes significant contributions to the social and environmental aspirations of the country,” said Evans. To date, ReconAfrica has drilled two test wells in their Namibian petroleum licence area, both of which have revealed evidence of a working conventional petroleum basin. The company plans to drill an additional two wells in 2021 to determine if the Kavango Sedimentary Basin will yield a commercially viable petroleum reservoir.
The joint venture partners foresee continued national economic opportunities, including local jobcreation, substantially adding to the more than 200 jobs for Namibians already generated by the current exploration program. In addition to the economic benefits that will flow from the agreement, which also include taxes and potential future royalties, the two companies have committed to the adoption of a stringent Health, Safety and Environment Plan that will guide operations.
During the last year, ReconAfrica has been working closely with all levels of the Namibian government, including regional and traditional leadership, as it planned and initiated drilling operations in the Kavango East and West regions.
“This engagement is a long-term commitment, supported by a growing management and technical team in Namibia that is focused on project management, stakeholder relations, environmental management, and wildlife conservation initiatives,” read a ReconAfrica statement.
ReconAfrica noted that it has already has demonstrated its commitment to the people of the Kavango regions with its support of Covid-19 public health measures through the donation of healthcare packages, hospital equipment and the drilling of four community water wells. This has been followed by a commitment to drill and donate another 16 community wells in the near term.