Namibia: The Oil and Gas Activities and Hydrocarbon Potential Obeth Mbui Kandjoze Manager New Ventures & Promotion NAMCOR AAPG International Conference & Exhibition November 5-8, 2006 Perth Convention & Exhibition Centre • Perth, Australia

Talk Outline Location Onshore & Offshore Basins Fiscal & Legal Regime Database Tectono-stratigraphic Development Source rock development and maturity Kudu Development Licensing Status

Location Windhoek Perth

Onshore & Offshore Basins

Fiscal & Legal Regime Petroleum (Exploration & Production) Act, 1991 Petroleum (Taxation) Act, 1991 Petroleum (Exploration & Production) Amendment Act, 1993 Petroleum (Exploration & Production) Amendment Act, 1997 &1998) Model Petroleum Agreement, 1998 Tax and Royalty System Royalty 5% PIT 35% 3 APT levels APT1 set at 25% after IRR exceeds 20% APT2 and 3 negotiable

Reconnaissance License License Types Reconnaissance License Duration not exceeding 2 years 2 year extenstion, non exclusive Exploration License Not exceeding 4 years, Exclusive 1st and 2nd Two year extensions Production License Duration 25 years 10 year extension

Database Exploration started off 1970’s 33,000 km seismic acquired Single well drilled 1974 Discovery of Kudu gas field in 1974 1980’s NAMCOR acquired seismic over Kudu 1987-1988 Kudu 2 and 3 drilled Kudu 3 tested; 38 MMscf/day

To date 14 wells drilled offshore Now Seismic Database 2D Data ECL 1989 –NAMCOR & Halliburton, a 10,600km 2D seismic offshore plus 3,770 km over Kudu remains the core of data Held 3 Lic. Rounds post 90’s Now Open Lic. System To date 14 wells drilled offshore Now Seismic Database 2D Data 35000 km non-exclusive seismic 45000 km proprietary data 3D Data 1345 sq km proprietary Aeromagnetic Data Satellite Gravity Surface Geochemical

Seismic & Well Database 1911/15-1 2012/13-1 1911/10-1 2815/15-1 Seismic & Well Database 14 wells drilled offshore Namibia 7 of these on or around Kudu 10 ODP/DSDP holes, mostly Neogene TD

Aeromagnetic & Satellite Gravity

Surface Geochemistry Data Complements satellite radar slick studies Proves existence of hydrocarbon systems offshore Namibia only gas shows isotopic analysis shows mature marine source rock

Tectonostratigraphy

Base Tertiary Unconformity Late drift section 4. Cen./Tur. source rock Early drift 3. Aptian source Base drift 'sdr' sequence 2. Neocomian source rock Syn-rift section Base rift unconformity Kudu ?SL SL AJ-1 r ? SM ef Submarine Erosion gf SL/SM 1. Artinskian source rock Pre-rift section Petroleum geology Gas shows (RSA Orange basin) Kudu with liquid component Oil show/recovery (AJ-1, RSA) Source rock intervals rift faulting extensional faulting gravity faulting Tectonic events SM marine SL lacustrine rf { P e m i a n E l y C t c o u s L T Stratigraphy Permo-Triasssic Karoo formation unconformable on basement. The Karoo formation overlain by Lower Cretaceous synrift sediments, followed by a terrestrial-marine transition sequence and a thick marginal marine Upper Cretaceous drift section. The Tertiary section dominated by marine claystones and silty claystones.

Two proven source rock intervals Source Rocks Two proven source rock intervals Aptian-Albian Turonian-Cenomanian Marine, oil prone High TOC values and significant HI”s

Aptian –Albian Source Rocks DSDP 361 Kudu 9A-2 2815/15-1 Albian clastics <1% TOC Type III AE-1 Aptian (4100m-4776m) 2-3% TOC KA-2 Albian (4500m-4700m) >4% TOC Apto-Albian (4800m-5100m) PA-1 Aptian (1900m-2100m) 2% TOC AF-1 Aptian HI >500g/kg OA-1 Apto-Albian (3742m-3793m) 3% TOC (6-8kg/tonne) 180-200 HI AC-2 Albian (2650m-2700m) Aptian (2900m-3100m) Analysis shows dominantly marine organic matter – presently in the gas to dry gas maturity stage Layered anoxis Aptian shales with very high TOC, alternating marine and terruginous influence >30kg/tonne 1911/15-1 Albian Carbonates No source potential 2213/6-1 2313/5-1 2513/8-1 No evidence of Albo-Aptian source in shelfal wells (thin or absent) Aptian-Albian (W1-W2) Source: Well penetrations

Cenomanian-Turonian SR DSDP 530 2012/13-1 Good Oil prone source 2815/15-1 L. Cenomanian (1860m-2000m) 1-2% TOC (Gas Prone) AE-1 L. Cenomanian (1600m-1700m) 3-5% TOC AK-1 L. Cenomanian (2700m-2750m) 4% TOC OA-1 Maastrichtian (2400m) >4% TOC 1911/15-1 W3/4 Cenomanian- Early Senonian W4 source potential TOC 5-10% The Cenomanian-Turonian interval has good to excellent source potential and where present & mature would be capable of significant oil generation over the Namibian Shelf W4 source potential TOC up to 5% 2513/8-1 No source rock potential identified Kudu wells – no source potential reported

Source Rock Correlation

KUDU Project Scheme Nampower Gas Sales Agreement US$ Kudu Upstream JV Energy Africa Kudu Limited (90%) Namcor (10%) + Partners Kudu Power Station Company Nampower (100%) + Partners (?) Gas Sales Agreement Nampower Power Purchase Agreement Domestic sales in Namibia Eskom - export sales to RSA Project critical hurdles: currency risks Eskom participation allocation of project risks US$ US$ or N$? Upstream JDA offer: minimal “fixed” return no commodity pricing

LICENSE BLOCKS

National Petroleum Corporation of Namibia www.namcor.com.na thank you ! National Petroleum Corporation of Namibia www.namcor.com.na