The government has approved BP Namibia Energy’s acquisition of 60% interests in three offshore petroleum exploration licences, clearing the way for the energy major to take over operatorship of PEL 97, PEL 99 and PEL 100.
Eco Atlantic announced on 2 October that formal ministerial approval for the transfer and assignment of the interests was received on 1 October.
The approval moves the transaction, first announced in April, closer to completion and gives bp operatorship of all three licences in Namibia’s Walvis Basin.
Under the agreement, Eco will transfer a 60% participating interest in each licence to bp while retaining 25%. NAMCOR holds 10%, and local partners hold the remaining 5%.
bp will carry Eco’s retained interest through the current exploration phase, including the costs associated with the interests held by NAMCOR and the local partners. Eco will also receive US$2.7 million at closing.
The exploration programme includes seismic reprocessing on PEL 97 and the acquisition of at least 3,000 square kilometres of new 3D seismic data across PEL 99 and PEL 100.
The three licences cover substantial acreage in the Walvis Basin. PEL 97 covers Block 2012A, PEL 99 covers Blocks 2111B and 2211A, while PEL 100 comprises Blocks 2211B and 2311A.
The transaction had previously received approval from the Namibian Competition Commission, leaving ministerial consent as one of the key outstanding regulatory requirements.
If the partners enter the second renewal period in 2028 and commit to drilling, Eco can transfer a further 10% interest in each licence to bp. In return, BP would carry Eco’s remaining 15% interest in an exploration well, subject to a maximum carry of US$21 million per well on each licence.
The potential drilling carry could therefore reach US$63 million across the three licences.
Eco president and chief executive Gil Holzman described the ministerial approval as a significant milestone towards completing the transaction.
“Securing final regulatory approval for the farm down of our Namibian portfolio to bp is a significant milestone for Eco and brings us towards completing this landmark transaction,” he said.
Once completed, the deal will establish BP as operator of the three exploration licences while leaving Eco exposed to future exploration activity without having to fund its retained interest during the current exploration phase.
