RE:RE:RE:what really going on with SEIGas may dash Big Oil's Namibian dreams
https://www.reuters.com/business/energy/gas-may-dash-big-oils-namibian-dreams-2024-11-07/
More gas than expected in fields
Geology means oil will cost more to produce
First production may be next decade
Government wants joint gas plan
PARIS/CAPE TOWN, Nov 7 - International companies and the government of Namibia had high hopes only months ago they could quickly cash in on offshore discoveries and turn the country they saw as the world's last frontier of untapped oil into a prolific producer.
They have since hit a major complication: an unexpectedly high percentage of gas in the fields, meaning they need to install additional infrastructure. That will slow development and may make projects unprofitable, according to executives, politicians and industry sources.
"What we are seeing is that all our discoveries have a very high gas-to-oil ratio," Namibia's Petroleum Commissioner Maggy Shino told an industry conference last month.
Namibian law bans flaring - or burning gas off, releasing CO2 into the atmosphere - meaning companies will have to inject the gas back into the reservoir or process it for consumption, which Shino said was in any case the right thing to do.
"We really want to utilise the gas and generate as much value as possible ... and start then the industry of gas-to-power and petrochemicals, established in Namibia," she said.
After initially hoping for first oil by 2026, Namibia's government is working with operators to agree on a single plan with common infrastructure for the 8.7 trillion cubic feet (tcf) of unexpected gas.
The idea is to revamp a long-stalled project, opens new tab to pipe gas to an onshore gas-fired power plant to supply Namibia, then neighbouring South Africa and the wider region.
Initially designed to handle 1.3 tcf from Namibia's smaller Kudu field, the power plant project and related gas infrastructure would need significant upscaling.
Namibia's government has started talks with Shell (SHEL.L), opens new tab, Total (TTEF.PA), opens new tab, Galp (GALP.LS), opens new tab and Norway's BW Energy (BWE.OL), opens new tab, and wants Namibia's national oil company Namcor lead the gas development plan.
For the companies, the problem is the additional work could delay oil production into the 2030s, making it harder to monetise.
Although the industry says oil will be needed for decades to come, the International Energy Agency (IEA) estimates global use will peak before 2030 as the world weans itself off carbon-emitting fossil fuels and as electric vehicle use increases, led by the world's biggest commodities consumer China.
For the major companies that have acquired or are seeking to invest in stakes in development blocks, that is a setback, industry sources told Reuters.
Info is starting to come out about the challenges, although there is multiple drills currently and looking forward SA 2025 where SA is sort of defrosting. Guessing there’s quite of few SH's who have been in super early in the sub 0.10's. You can’t blame anyone for taking profits in the 700 to 1000% range. And if someone hasn't at least derisked in my opinion is foolish. And my understanding of Rhino's impending drill will be closer to Jan 2025, since they just spudded a deepwater exploration well. Currently there's quite a few drill rigs available.(Valaris DS 10, Hercules, Noble voyager, along with two brand spanking new rigs sitting up Las Palmas. There's also the Walvis basin that's starting to gain a little attention. Still no news on ExxonMobil drill on the Angola side of the Namibe basin which concluded last week, where ExxonMobil has blocks on the Namibia side.