Angola and Namibia team up to encourage foreign investment.
In a spirit of inter-border comradeship, the state oil companies of Angola and Namibia have joined forces to promote the Namibe Basin, which straddles the boundary between the two countries and is thought to be a potentially bountiful source of hydrocarbons.
Representatives from Sonangol, Angola's national oil company, and Namcor, the state-owned company in Namibia, embarked upon a two-stop road show in March to share their enthusiasm for the basin. It is the last unexplored hydrocarbon-prospective subbasin within the West African Salt Basin province. The two countries hope to license several blocks in the basin.
The West African Salt Basin is one of the world's most prolific provinces, comparable to the Brazilian margin, the Gulf of Mexico and other basins in terms of exploration potential and proven hydrocarbon discoveries. In particular, the subbasins line up nicely with their Brazilian counterparts on the other side of the Atlantic, with the Namibe Basin characterized as an upper-plate boundary basin that correlates to the lower-plate Santos Basin offshore Brazil.
Three main depocenters are within the basin, with several potential source rocks identified from wells drilled in bordering areas. The wells indicate source richness and hydrocarbon-generation potential in the Santonian, Albian and Barremian levels. Both marine- and lacustrine-sourced oils have been identified from these wells. Geologists predict similar source potential in the Namibe Basin would exist in the syn-rift half grabens and in the post-rift Albian-to-Upper Cretaceous intervals.
Models indicate these sedimentary sections are mature within the oil window. Additionally, piston cores in the area show evidence of migrated hydrocarbons, and onshore outcrop studies show evidence of source-rich potential in the Aptian age claystone beds.
Based on this data, play potential is thought to exist in the Tertiary sand channels and lobes, the Albian shelf-edge carbonate bank, the lacustrine sand turbidites and carbonates, and the Albian syn-rift zone.
The two companies have pooled their databases to offer interested companies some additional background. In addition to basin maps and publications, about 2,111 miles (3,400 km) of 2-D seismic data have been shot over the Namibian portion of the basin between 1989 and 1998, and about 14,531 miles (23,400 km) of 2-D data exist over the Angolan portion, ranging in vintage from 1974 to 1999. Marine gravity and magnetic data accompany the seismic acquisition, and some interpreted data exists for the basin. Surface geochemical studies were conducted in 1994 and 1997, and more than 100 seabed piston cores have been analyzed. Some chemical data exists for the basin as well.
A satellite seep detection study is under way, and that data is being correlated with the seismic data to determine possible migration paths. All data is available through Sonangol and Namcor.
Contractual terms differ between the two countries. In Angola, the Petroleum Law of Angola controls foreign investment. This law determines that the state is the sole owner of all of the oil and gas finds. Sonangol is the sole concessionaire with the right to explore for oil and gas. So foreign companies wishing to invest must set up a production-sharing agreement with Sonangol and are considered contractors. Sonangol must participate in the management of the operations in any association, and it works with the operating companies to present to the government a plan for the utilization of any natural gas, since flaring is prohibited without prior ministerial approval.
In one case, 1,000 bbl of oil produced netted the foreign investors a 175-bbl profit. The state took 500 bbl right off the bat, and the remaining 500 bbl were split between the foreign investors (350 bbl) and Sonangol (150 bbl) based on a 15% rate of return. The 350 bbl then were taxed at 50%, netting 175 bbl.
Namibia, with much less oil and gas activity than its northern neighbor, has less stringent terms. Foreign companies work with the Petroleum Exploration and Production Division of the Ministry of Mines and Energy, with Namcor fulfilling an advisory role to the Ministry.
Three types of licenses are available. A reconnaissance license allows for spec surveys and stratigraphic drilling and lasts for 4 years with extensions available. The renewable exploration license gives the foreign oil company exclusive rights and follows the statutes outlined in Namibia's Model Petroleum Agreement. It involves work program commitments and lasts 4 years. Production licenses require the applicant to demonstrate a plan that is efficient and beneficial and outlines a timely use of resources. The company also must demonstrate it has the technical and financial ability, as well as the experience, to meet its commitments. Production licenses do not exceed 25 years but can be renewed for 10 years.

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