Repsol Follows BP Into Namibia on Prospects for First Oil

Repsol SA, Spain’s biggest oil producer, is following BP Plc into Namibia, a West African nation with no proven oil reserves.

Repsol will take a 44 percent working interest in offshore license 0010 and become operator of the block that may contain as much as 9.3 billion barrels of oil, Tower Resources Plc, a partner in the prospect, said in a statement in London.

“It’s an enormous validation to have one of the majors coming in,” Graeme Thomson, chief executive officer of Tower, said today in a telephone interview. “We hope to start drilling next year.”

Namibia’s coastal shelf may mirror that of Brazil across the ocean, where the Tupi field discovery in 2007 was the biggest offshore find in the Americas in three decades. The waters running along the west coast of Africa may hold 75 billion barrels of resources, according to U.S. Geological Survey research from 2010 and 2011, which didn’t cover Namibia.

“This acquisition is part of our extensive efforts to explore West Africa, which we think offers significant geological similarities to very large hydrocarbons formations on the other side of the Atlantic,” Kristian Rix, a spokesman for Repsol, said in an e-mailed response to questions.

BP became the largest shareholder in the Nimrod block earlier this year, where Chariot Oil & Gas Ltd. is now drilling a well targeting about 5 billion barrels of crude. Chariot’s Tapir South exploration well failed to find hydrocarbons in May.

Tower rose 10 percent in London, the most since January, to 3.23 pence. The company also raised 5.9 million pounds ($9.3 million) in a placing today in which it sold shares to existing owners at a 2.5 percent premium to the closing price on July 27.

Tower added to its ownership of the 0010 license to bring its holding to 30 percent. Repsol will own 44 percent after the deal, and Arcadia Petroleum Ltd.’s share will drop to 26 percent from 85 percent.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE