TotalEnergies Namibia has signed an agreement to purchase a 10.5% participating interest in block 2913B and a 9.39% participating interest in block 2912, both located offshore Namibia, from Impact Oil and Gas Namibia (Pty).
Upon completion TotalEnergies would own a 45.25% interest in block 2913B containing the Venus discovery and a 42.5% interest in block 2912, meanwhile, Impact is set to retain a 9.5% interest in each licence.
As part of the transaction which is still subject to customary third-party approvals from the Namibian authorities and joint venture parties, Impact will also be reimbursed in cash for its share of the past costs incurred on the Blocks, net to the farmout interests, which is estimated to be approximately N$1.8 billion (US$99 million).
The agreement provides Impact with a carry loan for all of Impact’s remaining development, appraisal and exploration costs on the Blocks from 1 January 2024, until the First Oil Date.
“As per this agreement, Impact will be reimbursed for the past costs incurred for these interests, through a N$1.8 billion (US$99 million) payment at closing. Impact will also be carried for its remaining interests until Impact receives the first sales proceeds from hydrocarbon production, secured via a repayment mechanism based on Impact’s share of production,” said Patrick Pouyanné, TotalEnergies Chairman and Chief Executive Officer.
TotalEnergies intends to share this additional participating interest with its strategic partner and joint venture member QatarEnergy.
Impact Chief Executive Officer Siraj Ahmed said the carry is repayable to TotalEnergies from Impact’s after-tax cash flow and net of all joint venture costs, including capital expenditures, from production on the Blocks post the First Oil Date.
He said during the repayment of the carry, Impact will pool its entitlement barrels with those of TotalEnergies for more regular off-takes and a more stable cash flow profile, and will also benefit from TotalEnergies’ marketing and sales capabilities.
“This is a pivotal transaction for Impact that paves the way for its transition from an exploration company to a hydrocarbon producing company, through its participation in the development of the world class Venus discovery. This transaction also enables Impact to participate in further significant exploration opportunities in the Blocks, offering the potential to significantly grow the existing discovered resource base,” said Ahmed.
Meanwhile, Pouyanné said this transaction not only increases the Total’s share in the Venus discovery and remaining prospectivity on these blocks, but also represents a key step toward the development of Venus by consolidating the partnership and securing financing of all partners which will add value to all stakeholders.
TotalEnergies has been present in Namibia since 1964 and employs 55 people. TotalEnergies operates two offshore exploration licences in the Orange Basin: Blocks 2912 and 2913B.
TotalEnergies is also the fourth largest fuel distributor in the country, with 40 service stations. In line with its multi-energy strategy, the company is looking for local opportunities to develop low carbon projects in the country.
This comes as the French energy giant has allocated almost 50% of its global exploration budget of N$5.5 billion (US$300 million) to Namibia in 2023, aiming to confirm the multibillion-barrel discovery in Block 2913B (PEL 56) located in the Orange Basin.
Block 2913B covers approximately 8,215 km² offshore Namibia. TotalEnergies serves as the operator with a 40% working interest, in partnership with QatarEnergy (30%), Africa Oil’s Impact Oil and Gas (20%), and Namibia’s NAMCOR (10%).
The Venus discovery is a light oil and associated gas field situated in the Orange Basin, approximately 290 kilometers off the coast of southern Namibia, and at a water depth of around 3,000 meters.
