PETROLEUM EXPLORATION AND POSSIBLE PRODUCTION OPPORTUNITIES FOR THE LICENSE 0058 COVERING BLOCK 2113A WALVIS AND HUAB BASINS, NAMIBIA, SOUTH ATLANTIC MARGINS
PRESENTATION OUTLINE 1. NABIRM CORPORATE PROFILE 2. NAMIBIA AT GLANCE 3. FISCAL TERMS AND FINANCIAL MATTERS 4. KEY LEGISLATIONS 5. LOCATION OF THE LICENSE 0058 6. PETROLEUM SYSTEMS OF THE WALVIS BASIN 7. PETROLEUM SYSTEM OF THE HUAB BASIN 8. EXPLORATION STRATEGY AND COMMITMENTS 9. CONCLUSIONS AND OPPORTUNITIES
NABIRM CORPORATE PROFILE NABIRM was awarded the Petroleum Exploration License No. 0058 covering Block 2113A following the signing of the Petroleum Agreement with the Namibian Government on May 8, 2012. The License is 90% held by NABIRM Energy Services (PTY) LTD a Namibian registered company with a focused interest energy sector including petroleum Resources development. A wholly owned subsidiary of Nabirm Global LLC, is focused on oil prospecting, exploration, and petroleum. NABIRM Global, LLC is a U.S.-based mining and energy services company focused on maximizing the value of its global assets portfolio. Nabirm Global LLC, the parent company of Nabirm Energy Services (Pty) Ltd is an affiliate and subsidiary company of the Masada Resource Group (MRG)
EXPLORATION OBJECTIVES The overall strategic exploration model for the proposed hydrocarbon search in Block 2113A target the following: Basin margins associated with the Walvis and Huab Basins; Structural features associated with the regional geological setting of the basins margins with potential structural trap / reservoirs; Onshore and offshore basin margins geological sediments as potential sources and reservoirs rocks. The overall exploration strategy will focus on the Walvis and Huab Basin evaluations and active petroleum systems through the evaluation of existing historical data sets and acquisition of 2D / 3D seismic data on key selected site- specific targets leading to drilling and petroleum discovery.
NAMIBIA AT GLANCE Situated on Africa’s south - western seaboard Stable Democracy with population of 2.1 million people (2011) Modern legislative framework with good tenure security One of the lowest political risk jurisdictions in Africa Capital city is Windhoek BBB Country Risk Profile (The Economist, 2010) GDP of 14.64 billion USD (2010) Per Capita $6,900.
NAMIBIA INVESTMENT CLIMATE Democratic Government Since 1990; Stable, peaceful and civil society; Excellent infrastructure and services; Rule of Law with amenable Petroleum legislation and systematic Environmental Approach; Repatriation of Profits; Highly Prospective Petroleum Basins; Favourable Namibia Dollar exchange rate.
FISCAL TERMS There are three principal components in the fiscal package: Royalty which is levied at the rate of 5% of the market value of oil and gas produced and saved. (Under earlier Rounds the rate was 12.5%). In special circumstances, the Minister may defer, remit or refund Royalty due, upon application made by the holder of a production licence ; Petroleum Income Tax (PIT) PIT is levied at the rate of 35% of taxable income. (Until 1998, the rate was 42%) , and; Additional Profits Tax (APT) will only be paid if the petroleum operations in a Licence Area earn an after-tax real (i.e. inflation- adjusted) rate of return of 15%. The second and third tiers of APT become payable once the profitability level exceeds 20% and 25% respectively.
ECONOMIC TERMS The Fiscal Terms are supplemented by the provisions of the Model Petroleum Agreement, 1998, these three fiscal elements are framed in modern legislation, which has been specially formulated for the international oil industry and the following must also be noted: 1. There are no signature, discovery or production bonuses; 2. There is import duty free tax on items needed for petroleum operations (e.g. fuel being an example of an exception); 3. Oil companies are exempt from the Non-Resident Shareholders' Tax; and 4. Although desired, there is generally no mandatory requirement for State (NAMCOR) participation.
FINANCIAL MATTERS TERMS Inline with standard international practice, license application fees, annual license area rental charges and annual training sums are payable in addition to the main fiscal impositions. Annual License area rental charges (which are deductible in the computation of PIT and APT, and are not indexed to inflation) are as follows: N$60 (approx. US$7) per sq. km. of exploration area held during the first 4 years (and any discretionary extension period); N$90 (approx. US$10.6) per sq. km. of exploration area held during the next 2 years (and any discretionary extension period); N$120 (approx. US$14) per sq. km. of exploration area held during the subsequent 2 years (and any discretionary extension period); N$150 (approx. US$17.7) per sq. km. of exploration area held during any third renewal period; N$1,500 (approx. US$177) per sq. km. of production area held.
OTHER COMMITMENT TERMS Petrofund: Licensees must commit to spend a (biddable and negotiable) minimum annual amount specifically on the training of Namibians in petroleum and petroleum-related matters. Decommissioning Trust Fund: As a result of the Petroleum Laws Amendment Act, 1998, licensees will be required (as from the date when half of the estimated petroleum reserves have been produced) to make annual contributions into decommissioning trust funds. These annual contributions will be deductible in the computation of taxable income for both PIT and APT.
PETROLEUM LEGISLATION The Petroleum (Exploration and Production) Act, 1991 - which sets out the Royalty (as well as the level of application fees and annual area rental charges). The Petroleum (Taxation) Act, 1991 - which sets out the PIT and APT. Petroleum (Exploration and Production) Amendment Act 1993 (Act 2 of 1993): to amend the Petroleum (Exploration and Production) Act, 1991, so as to provide for training programmes and contributions to the Petroleum Training and Education Fund; The Petroleum Laws Amendment Act, 1998 - which introduces a number of specific new incentives for Third Round licensees. Petroleum Act 1991: Regulations - relating to the health, safety and welfare of persons employed, and protection of other persons, property, the environment and natural resources.
OTHER KEY LEGISLATION Environment: Environmental Management Act (2007) Water Resources Management Act, 2004 Other laws, regulations and policies. Investments Legislation: Foreign Investment Act , 1990 (Act No. 27 of 1990); Competition Act, 2003 (Act No. 2 of 2003); Anti-Corruption Act, 2003 (Act No. 8 of 2003); Affirmative Action Act, 1998 (Act No. 29 of 1998).
LOCATION OF THE LICENSE 0058
LOCATION OF THE LICENSE 0058
EXPLORATION TARGETS FRAMEWORK OFFSHORE TARGETS (WALVIS BASIN) Basal Tertiary Clastics and Turbidites, upper Cretaceous Clastics and Turbidites and lower Cretaceous Carbonates ONSHORE TARGETS (HUAB BASIN) Structurally controlled hydrocarbon trap mechanism linked to Basin margin setup; Karoo sediments sequence within Verbrande Berg formation and tight shale for Coal Bed Methane Opportunities.
PETROLEUM SYSTEMS OF THE WALVIS BASIN A) B) Modified from Davison, 2005 Source: Schmidt, 2004
BASIN HOMOLOGOUS Very good correlation between the hydrocarbons on both sides of the margins. Modern geochemical analysis to Kunene-1 exploration well has evidenced the presence of oils with similar fingerprints (geochemistry) to those present in Campos basin Source: Schiefelbein et al., 1999 offshore Brazil.
PETROLEUM SYSTEMS OF THE WALVIS BASIN Source: Ministry of Mines and Energy, 2012
EVOLUTION OF THE OF THE The Huab Basin, covering the onshore portion of the License 0058 (Block 2113A), in NW Namibia and formed a connected basin with the Paraná throughout Karoo times (late Palaeozoic) into the Lower Cretaceous HUAB BASIN Martin (1961, 1975) proposes that the Huab Basin provides clear evidence of a larger, lacustrine Karoo basin in the west. According to Hegenberger, (1992), the Huab Basin was an eastward-projecting bay of the Paraná Basin of Brazil during Gondwana times. The Ecca Group sediments fill a glacially incised Aba-Huab valley in the east, which then spreads out into the broad Huab Basin further west. As the basin deepened gradually westwards a marked facies change occurred from deposits in shallow-water conditions .
STRATIGRAPHY OF THE HUAB BASIN System Group Formation Etendeka Group Etendeka lava field Early Cretaceous Twyfelfontein Formation Jurassic West East Triassic Krone Upper Gai-as Permian Karoo Supergroup Gudaus Ecca Group Rino Wash Probeer Lower Permian Tsarabis Verbrande Berg Dwyka Carboniferous Not sub-divided Group Source: Horsthemke et al., 1990
OPPORTUNITIES OF THE HUAB BASIN Source: Horsthemke et al., 1990
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