Custos Energy will contribute N$10 million towards the construction of the University of Namibia’s planned new campus in Walvis Bay once its deal to transfer a stake in offshore oil licence PEL 90 to Chevron is completed.
The contribution will be made through the Knowledge Katti Foundation to the UNAM Foundation and is expected as soon as the required regulatory and other approvals for the petroleum transaction have been obtained.
Custos announced the commitment on Wednesday as part of an agreement under which its wholly owned subsidiary, Trago Energy, will transfer its entire 10% participating interest in PEL 90 to Chevron affiliate Harmattan Energy Limited.
Custos chairman and chief executive Knowledge Katti said the contribution would support the establishment of UNAM’s first campus in Walvis Bay and allow students to study closer to Namibia’s emerging offshore oil and gas industry.
“Namibia’s greatest resource is its young people,” Katti said. “As a son of Walvis Bay, I am proud that we can help bring UNAM’s first campus to the town. It is a strategic investment that will allow young people from all over Namibia to study close to where the industry is based.”
The N$10 million contribution is conditional on completion of the PEL 90 transaction and has therefore not yet been paid.
Custos said the donation builds on the Knowledge Katti Foundation’s support for education, which it said has included sponsoring more than 120 Namibian students to attend university.
The announcement comes as UNAM moves ahead with plans for its new Walvis Bay campus, a development expected to strengthen the university’s presence at the coast at a time when Walvis Bay is positioning itself around expanding energy and industrial activity.
Under the transaction that will trigger the contribution, Trago will transfer its 10% participating interest in PEL 90 to Chevron in exchange for US$11 million in cash at completion.
Trago could receive further consideration if specified appraisal and production milestones are achieved. Custos said this includes revenues associated with commercial production currently estimated at between 1.5 million and 2.5 million barrels of oil, depending on commodity price assumptions.
The transaction remains subject to government, regulatory and third-party approvals.
PEL 90 is also the location of the planned Nabba-1X exploration well. Despite disposing of its direct participating interest, Custos said the transaction structure would allow it to retain exposure to future developments on the licence while removing Trago’s direct funding and capital risk.
Katti said Custos had participated in PEL 90 since the licence was awarded in 2018 and had helped bring Chevron into the licence in 2022.
“As a local company that has been a participant in PEL 90 since its award in 2018, we have been a proud champion of its potential. We were pleased to be able to bring Chevron to Namibia in 2022 as the operator of this marquee license, as well as more recently seeing Qatar Energy and Equinor join the licence as partners,” he said.
“This transaction allows us to continue our exposure to the very bright future ahead, but in a more capital and risk efficient manner. It demonstrates the creativity of local Namibian companies and their ongoing role in attracting international resources to be invested for the benefit of all Namibians.”
The N$10 million commitment links the offshore transaction directly to UNAM’s planned expansion in Walvis Bay, although payment remains dependent on the PEL 90 transaction reaching completion.
