Azule completes Namibia farm-in with first oil well drilled

Azule Energy, a joint venture between oil majors Eni and BP, has officially entered Namibia, farming into Petroleum Exploration License 85 on the day that operator Rhino Resources spudded the block's first wildcat.

In a pair of statements released by Rhino late on Dec. 18, the Cape Town-based independent said its farm-out agreement with Azule for offshore block 2914A, part of PEL 85, had completed after securing approval from Namibian authorities.

The block is nestled in Namibia's red-hot Orange Basin, which has seen a flood of interest from the world's biggest oil and gas companies since the huge Venus and Graff discoveries by TotalEnergies and Shell respectively in early 2022.

PEL 85 lies east of Venus and north of Graff. It also sits south of Galp's huge Mopane find, which has IOCs lining up for a stake.

The deal means that Rhino and Azule each hold 42.5% interests, while state-owned Namcor and Korres Investments have 10% and 5% respectively. Rhino will retain its operatorship through the exploration phase, it said in its statement, while Azule has the option to become the operator during the development phase.

Azule was established from BP and Eni's Angolan assets to combine investments and expertise to maximize production and help spur an oil and gas revival in the West African country, which has seen output fall in recent years.

The PEL 85 farm-in represents the company's first foray outside Angola, although industry experts have pointed out the geological parallels between the neighboring countries.

"We are pleased with the support from Namibian authorities and our partners Rhino, Namcor and Korres that allowed us to achieve this milestone," Azule's CEO Adriano Mongini said in a statement. "Azule is fully committed to leverage on our experience to safely and reliably unlock the hydrocarbons potential of the license, and delivering value for all Namibian stakeholders."

Sagittarius spud

The deal was completed just as Rhino announced it had commenced its drilling campaign on PEL 85, through the Sagittarius 1-X well, spud at water depths of 1,400 m using the Noble Venturer drillship.

It is the first of a two-well campaign to be drilled back-to-back, Rhino said, and will be completed in 45 days.

"This is a very exciting moment for Rhino and our partners as we reach the culmination of almost a decade's worth of work in the region," CEO Travis Smithard said in a statement. "During that time, we have accelerated investment to progress our understanding of the subsurface, and in parallel, have seen the basin become one of the most exciting postcodes for exploration drilling. This has enhanced our confidence in the impending drilling program though we remain grounded in our pragmatism given this is frontier exploration."

Namibia was considered an exploration backwater until the 2022 discoveries. Its government now estimates it to hold 10 billion barrels of recoverable oil resources.

S&P Global Commodity Insights analysts expect the country to achieve first oil in 2030.