Visitors to Swakopmund and Walvis Bay, on Namibia’s remote shores, have traditionally been drawn by the promise of excellent birdwatching, dolphin spotting and even dune-biking. If all goes to plan over the next few years, people may soon be coming to witness something completely different: an oil boom.

Chariot Oil & Gas, a London-listed oil and gas company with an extensive licence area in the country, plans to drill its first deepwater exploration well this April, 80km offshore. The prospect in the Namibe basin has a 25 per cent chance of success, according to the company, and prospective resources of 604m barrels. The well will take about two months to drill and the industry will be watching closely.

Chariot is among several independent companies that have secured exploration acreage in recent years. A number of wells is planned for this year, targeting prospects of billions of barrels.

“There is a lot of rig activity in Walvis Bay,” says Paul Welch, chief executive of Chariot. “It’s starting to feel like you’re in an area with oil potential. It feels similar to how Gabon or Brazil felt 15 to 20 years ago. Namibia is on the cusp.”

Better known for its uranium deposits, Namibia was once largely ignored by the world’s oil and gas majors, who were busy pursuing lucrative opportunities elsewhere, in Nigeria and Angola.

Exploration in the South Atlantic has traditionally focused on salt basins off west Africa but recent discoveries have confirmed that potentially prolific rocks extend into previously underexplored areas, including parts of Namibia. The country has some of the same geological formations as Brazil, whose pre-salt fields have attracted much investment. In Namibia, only the northernmost areas at the border of Angola have a salt layer.

Of greatest interest are four separate basins that have been identified offshore: the Orange basin, which contains the Kudu gas discovery made by America’s Chevron in the 1970s, Lüderitz basin, Walvis basin and the Namibe basin.

“The geology looks favourable. There are some analogies both to the north of Namibia, with Angola and Gabon which have proved to be attractive places to explore and also across the Atlantic,” says Martin Kelly, lead analyst for sub-Saharan Africa at Wood Mackenzie, the consultancy.

“But this has to be tempered by the fact that there has not been a critical mass of exploration wells drilled yet, so the hard data points are limited,” he adds.

The Namibian government last summer announced the discovery of potentially vast oil reserves off the southern coast, estimated to hold 11bn barrels according to local reports.

Although industry analysts caution that more drilling needs to take place to verify such estimates, interest in the country has been such that big companies have started to take positions. BP, the UK oil group, partnered with Chariot Oil & Gas last year and this month revealed a second investment alongside Serica Energy, another London-listed independent. Petrobras, the Brazilian state-backed company, has also partnered with Chariot.

The explorer has about $175m of cash following a recent placing of shares that raised close to $49m. The company says it has sufficient capital expenditure to complete its planned exploration programme, including the drilling of three wells.

Among Namibia’s attractions are its relatively attractive fiscal terms. The government’s share is about 55 per cent, which compares favourably with those in Equatorial Guinea, Angola and Nigeria.

The country’s mood is optimistic. Forty years after the Kudu gasfield was discovered, and after numerous ownership changes, the site, which holds an estimated 1.2tn cubic feet of reserves, could finally be developed. The mines and energy minister last summer approved a production contract for 25 years. The partners on the field are Namcor, Namibia’s state-owned energy group, Tullow Oil and Japan’s Itochu. Part of the development plan includes providing gas feedstock to an 800 MW power station.

NamPower, the national electricity utility, intends to use part of the output domestically with the rest to be exported to the larger market of South Africa.

Tullow told investors last month an agreement on project development and gas sales was in progress. The company aims to make a final decision towards the end of this year, which could mean the delivery of gas and power generation by the end of 2015.

With so much acreage in the hands of smaller players, many will be looking to sell stakes to larger rivals, says Mr Kelly.

Interest from supermajors is strong in all of sub-Saharan Africa. “We’ve seen an upsurge in interest throughout [sub-Saharan Africa] over the past year, particularly in frontier exploration plays,” Mr Kelly says.

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