REPSOL, Spain's biggest oil producer, is following BP into Namibia, a country with no proven oil reserves.
Repsol will take a 44% working interest in the offshore licence 0010 and become an operator of the block, which may contain as much as 9,3-billion barrels of oil, Tower Resources, a partner in the prospect, said in London.
"It's an enormous validation to have one of the majors coming in," Tower CEO Graeme Thomson said yesterday. "We hope to start drilling next year."
Namibia's coastal shelf may mirror that of Brazil's, across the ocean, where the Tupi field discovery in 2007 was the biggest offshore find in the Americas in three decades. The waters running along the west coast of Africa may hold 75-billion barrels of resources, according to US Geological Survey research from 2010 and last year, which did not cover Namibia.
"This acquisition is part of our extensive efforts to explore West Africa, which we think offers significant geological similarities to very large hydrocarbons formations on the other side of the Atlantic," Kristian Rix, a spokesman for Repsol, said.
BP became the largest shareholder in the Nimrod block earlier this year, where Chariot Oil & Gas is drilling a well of about 5-billion barrels of crude. Chariot's Tapir South exploration well failed to find hydrocarbons in May.
Tower rose 10% in London yesterday, the most since January, to 3,23p. The company also raised £5,9m in a placing yesterday in which it sold shares to existing owners at a 2,5% premium to the closing price last Friday.
Tower added to its ownership of the 0010 licence to bring its holding to 30%.
Repsol will own 44% of the licence after the deal, and Arcadia Petroleum's share will drop to 26% from 85%.