Offshore staff
OSLO, Norway – BW Energy is looking to develop the Kudu gas field, 130 km (81 mi) offshore Namibia in 170 m (558 ft) water depth, by converting the semisubmersible drilling rig Leo to a floating production platform.
The company has signed an agreement to acquire the rig from Aquadrill LLC for $14 million.
Carl Krogh Arnet, CEO of BW Energy, said: “The revised development concept offers tangible financial, schedule, and environmental benefits. The re-use of existing facilities also supports a substantial reduction in field development-related greenhouse gas emissions compared to a newbuild.”
He added: “The replacement of imported power with domestic power produced with natural gas will reduce Namibia’s carbon footprint and ensure power stability for the future.”
Development of Kudu would allow BW Energy to work in the electricity sector, potentially assuming a position as an independent power producer via a partnership.
Timing of the final project sanctioning remains subject to arranging finance for the Kudu gas to power project.
Kudu was discovered in the Orange sub-basin 1970s by Texaco, with operatorship subsequently passing to Shell, Energy Africa, and later Tullow Oil, before a BW subsidiary took charge in 2017, supported by Namibian state oil company NAMCOR.
BW Energy estimates proven reserves at 1.3 tcf, with further potential in the range 3-9 tcf.
Under the agreement with Aquadrill LLC, if the Leo is used in the future to perform drilling services, liquidated damages of $50,000 will apply for each day the unit operates in this format, up to a maximum of $6 million.
Additionally, if within the first two years of closing the rig is sold on with terms that do not exclude use for drilling purposes, and the re-sale price is more than $15 million, the buyers will be obliged to pay a further sum to Aquadrill LLC.
Certain equipment items belonging to the rig have been excluded from the sale including the BOP, top drive and travelling block, which Aquadrill LLC will retain for its capital spares inventory.
10/26/2021
