TotalEnergies has struck a deal with Impact Oil and Gas, its partner in Namibia, acquiring the smaller company’s stake.
Total is gaining a 10.5% stake in Block 2913B and 9.39% in Block 2912. The French company is the operator and has made a number of discoveries in the area, including the giant Venus find.
In return, Total will reimburse Impact for past spending and carry the smaller company until reaching first sales.
Total said it planned to share the additional equity with its partner on the block, QatarEnergy.
Impact will keep a 9.5% stake in each block. Total will have 45.25% in Block 2913B, which holds Venus. It will also have a 42.5% stake in Block 2912.
Total is to pay $99 million for past spending from Impact.
“This transaction not only increases our share in the Venus discovery and remaining prospectivity on these blocks, but also represents a key step toward the development of Venus by consolidating the partnership and securing financing of all partners which will add value to all stakeholders”, said Total CEO and chairman Patrick Pouyanné.
Total discovered the world-class Venus field in February 2022. The company re-entered the well and tested it in the third quarter of 2023, with positive results.
The companies have also drilled the Venus-1A appraisal well on the structure and they are drilling a third well, Venus-2A. The Deepsea Mira is drilling the Venus-2A while the Tungsten Explorer is working on the Mangetti-1X exploration well. This latter well will be deepened to test the north of Venus.
Total is also carrying out a 3D seismic programme on the southern part of Block 2913B. This is to follow up a 2D survey, which found potential prospects at Damara and Damara South.
Impact holders
One of the shareholders in Impact is Hosken Consolidated Investments. The South African owner noted earlier this year that “the development costs of blocks like this are way beyond” its funding capacity. As such, Impact had begun a process to sell down its stake.
Hosken opted against paying a dividend in December because of this funding squeeze.
Africa Oil also has a stake in Impact. Africa Oil president and CEO Roger Tucker said the agreement was a “very attractive growth opportunity”. The deal will “add significant reserves and production to our portfolio from the late 2020s through the 2030s and beyond, without stretching our balance sheet or exposing ourselves to the execution risk on a large-scale deepwater project”.
The deal gives Impact and its shareholders a share of the upside, Tucker continued, with zero capital expenditure.
For Africa Oil, the agreement also serves to demonstrate how the company may benefit from its strategy of acquiring stakes in other explorers.
Updated at 8:34 am with the eighth, ninth and tenth paragraphs.
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