Chariot Oil & Gas Ltd., the U.K. explorer that failed to find crude in Namibia, is using information from its unsuccessful wells to get closer to making a discovery, Chief Executive Officer Larry Bottomley said.
“We learned technically an enormous amount from our wells and that has significantly refocused where it is that we’re addressing our exploration,” Bottomley said in an interview in Namibia’s capital, Windhoek. “We happen to be in areas where we’re looking for elephants, so looking for giant fields.”
Namibia has attracted explorers on a bet that its coastal shelf has similarities to Brazil, where the offshore Tupi find in 2007 was the largest in the Americas in three decades. Even with investment from Chariot and partners BP Plc and Petroleo Brasileiro SA, commercial crude deposits haven’t been found and Namibia’s sole gas field has sat idle since its 1974 discovery.
“Namibia is a frontier area: it is unproven to have material accumulations of hydrocarbons to date, but we believe that’s just a function of drilling density and exploration maturity,” Bottomley said yesterday. The CEO joined Guernsey, Channel Islands-based Chariot in 2011 as a non-executive director in charge of new ventures and took the top job in 2012.
The explorer owns blocks in three basins along Namibia’s coast and announced plans last year to drill at least two wells in the country’s central blocks. It has lost 88 percent of its market value since May 14 last year, when it failed to find oil at Tapir South off northern Namibia. In September Chariot also failed to find commercial quantities of crude at Nimrod in the south, a prospect where it’s still gathering data.
“All it would take would be somebody to unravel the secret, what it is that makes Namibia work and there’ll be a whole significant follow-up potential,” Bottomley said.
Chariot says it’s identified a potential find off southern Namibia and plans to process more seismic data at the site next year. Brazil’s HRT Participacoes em Petroleo SA and Spain’s Repsol SA also have drilling programs in the country, increasing the number of wells there to 14 or 15 in next 18 months, from 11 now, Bottomley said.
“It’s still a very immature exploration province and it’s a proven petroleum system,” he said. “It took 22 wells in the North Sea to make the first discovery and I think it was about 26 wells in the Gulf of Mexico.”
Chariot, which also has blocks in Mauritania and Morocco, is among companies boosting investment in exploration following a four-year increase in the price of crude. While oil has now dropped below $100 a barrel, explorers undertaking high-risk projects such as Chariot are less discouraged because of the potential for large discoveries, according to Bottomley.
“We’re unashamed elephant hunters and we’ve got contracts that are commensurate with the risk that we’re taking.”
The company is fully funded for the next couple of years, he said.