Intrepid explorers target next onshore frontier

Intrepid explorers are breathing new life into the onshore hunt for oil and gas in southern Africa, with activities picking up in Namibia and South Africa, in particular, but also in Botswana.

In Namibia, junior players aiming to strike it lucky are focusing their efforts on the Kavango basin, where drilling is under way, and the Etosha-Owambo basin, where seismic work is afoot.

To the south, petroleum studies are under way in the promising Nama basin.

Almost 100 years ago, this play hosted Namibia's first exploration well, which suffered a gas blowout.

Decades later, BP and Shell took a close look at this big basin and drilled an unsuccessful well — albeit with gas shows — before walking away for good.

Compared to Africa’s offshore domains, exploring the continent’s frontier onshore plays and developing any discoveries has always been tricky, with intrinsic challenges around costs, logistics, politics, environment and local communities, but the rewards can be significant.

Since the 1940s and 1950s, Egypt, Nigeria, Algeria and Libya have emerged as the key onshore E&P arenas, while much of Sub-Saharan Africa was largely ignored, despite the results of some intriguing wildcats in the likes of Uganda.

However, the Sub-Saharan region came into its own in the last 25 years or so due to the discovery and exploitation of billions of barrels of oil in Sudan — now South Sudan — and Chad, with Uganda also expected to start production in 2025 or 2026.

Projects in this trio of landlocked countries, usually backed by deep-pocketed supermajors and overseas state-owned companies, depend on the construction of pipelines to ports in adjacent nations to generate revenues, which creates geopolitical risks.

Despite their size, other projects have failed to fly — Ethiopia’s Calub-Hilal gas scheme and the Lokichar oil development in Kenya are two recent examples — largely for commercial and political reasons, but noticeably these developments are in the hands of smaller companies, not the majors.

Africa’s onshore E&P scene has become yet more challenging in recent years, driven by political and economic instability across the Sahelian nations.

For example, souring relations between Niger and Benin have stopped piped oil exports from Chinese-controlled fields in the Agadem basin, while South Sudan’s production is being jeopardised by a civil war in neighbouring Sudan.

There is also the increasing menace posed to workers, operations and assets by Islamist groups, particularly in North Africa, while the ever-present issue of oil theft in Nigeria keeps worried investors up at night.

In contrast, southern Africa’s onshore plays — insurgency-hit northern Mozambique is the exception — appear to offer more stable political and business environments.

Small gas and helium projects are on the move in South Africa, driven by players such as Renergen, whose success has inspired others to seek a foothold in this unusual play, including D3 Energy, Rhino Oil, Panoro and Imbokodo, while players such as Kinetiko are in the vanguard of exploring for and developing South Africa's onshore conventional gas resources.

In Zimbabwe, Invictus is preparing a second-phase drilling campaign following its promising initial discovery in the Cabora Bassa basin, while Botswana continues — albeit slowly — to prove up coal bed methane resources via companies such as Kalahari Energy, Tlou and Botala.

Namibia in particular has become an increasingly attractive destination for exploration dollars.

The run of major offshore Orange basin discoveries drilled by TotalEnergies, Shell and Galp Energia since 2022 has also sparked new interest in the country’s neglected onshore offerings, with Windhoek’s investor-friendly environment and placid politics proving irresistible to many go-hung explorers.

The most high-profile onshore operator is ReconAfrica which is in the middle of a two-well exploration campaign in the remote Kavango basin in the northwest.

Partly due to Recon’s activities, industry’s current interest is focused on northern Namibia.

Located west of the Kavango play is the Etosha-Owambo basin, where players such as Monitor Exploration, Babecca Business Links, Exito Energy Resources, Elephant Oil and Apprentice Investments have secured licenses, according to mapping data published in March 2024 by Namibia’s Petroleum Commission.

Monitor, working with 88 Energy, is making plans to drill in the basin, which has hosted a smattering of legacy exploration wells.

Namibia's Petroleum Commission has highlighted its negotiations with companies over seven blocks surrounding Etosha National Park, as well as acreage in the Caprivi Strip.

Exploration eyes are also being drawn to the south, intrigued by the potential of the Waterburg and Nama basins.

Toronto-listed junior Sintana Energy has an indirect interest in Apprentice, which gives it exposure to petroleum exploration licence 103 in the Waterburg.

Sintana’s website states that thick Permian Karoo Supergroup sediments are present in PEL 103, with Permian source rocks expected as well as reservoir intervals ranging from Permian to Triassic.

The Canadian company noted that a small portion of the basin has been drilled to date and untested sub-basins are likely to exist.

Further south, a company called Namibia E Source Petroleum has reconnaissance licenses covering four blocks in the frontier Nama basin.

Monitor has also applied for a petroleum exploration licence in this basin, which is neo-Proterozoic in age and has signs of a working petroleum system.

Robin Sutherland, Monitor’s technical advisor, told Upstream: “We used our toolbox of onshore screening techniques to identify the most prospective part and agreed with the Ministry of Mines and Energy on a work programme (including) low-cost onshore surveys over the next four years.”

The former Tullow Oil executive said that, based on Monitor’s work, which includes legacy data and reports, its acreage has the potential to house about 2 billion barrels of in-place resources.

In a presentation on the basin given to Finding Petroleum earlier this year, he noted that this resource estimated was based on four identified leads.

Offering support for the existence of a working petroleum system in the basin, Sutherland points to seeps and results from legacy wells.

Drilled in 1928, the Berseba-1 wildcat — Namibia’s first onshore probe — was drilled to a depth of 1009 metres before being hit by a gas blowout at about 368 metres.

Another well, Vreda-1, drilled in 1963 by Artnell Exploration to 1840 metres, had gas shows.

In the late 1960s, Shell and BP, in partnership with diamond miner De Beers, picked up acreage in the southern Nama basin, shot 2D seismic and drilled the Tses-1 probe to 2225 metres, another probe with gas shows.

Namcor also drilled a couple of exploration wells in the early 1990s, while Croatia’s Ina shot seismic between 2005 and 2007.