Shares of SA investment holding company HCI gained the most in four weeks on Tuesday on a Norwegian news report that a Namibian offshore field it holds a 10% stake in could be the world’s largest ever deep-sea oilfield.
The field called Venus-1X off the Namibian coastline may have as many as 13-billion barrels of oil and more than 10-trillion cubic feet of natural gas, authoritative Norwegian specialist energy and oil publication Upstream reported.
HCI, run by Johnny Copelyn the former general secretary of the SA Clothing and Textile Workers’ Union (Sactwu), owns 49% of Impact Oil, a private company that explores large deep sea oil and natural gas opportunities primarily off the African coast.
Impact owns a 20% stake in the Venus field, located about 290km off the coast of Namibia.
Impact refused to comment on the Norwegian news report that cited insiders suggesting the field was the world’s biggest offshore oil find, with a store much larger than the 3-billion first announced by Upstream.
The finding of the oilfield, also known as block 2913B, was announced in February by majority owner French oil firm Total Energies. Namibian state company Namcor and Qatar Energy (30%) also hold a stake in the field.
Canadian group Africa Oil Corporation, which owns a 6% stake in the Venus field through its holding in Impact, had gained more than 25% since the Upstream report. The moves bode well for HCI shareholders.
The oil could take up to a decade to extract, meaning HCI and Impact will need to invest large amounts of capital over the long term.
Paul Whitburn at Rozendal partners, an HCI shareholder, says: “It is truly a unique find and looks to be very large, although only one well has been drilled.”
When details of the field were first revealed, Impact exploration director Philip Birch said: “This opening discovery firmly places the deepwater Orange Basin as one of the world’s most exciting areas for hydrocarbon exploration, and validates Impact’s focus on the highly prospective Southern Africa Cretaceous oil and gas play, which extends from southernmost Namibia to the east coast of SA.”
Impact also owns an almost 19% stake in a deep-sea site neighbouring Venus, which is also being explored for oil and gas.
Whitburn says what shareholders want to know is how the seven- to 10-year process it takes to drill and extract oil will be funded. “How do Impact oil and HCI pay for the potential capital commitments? That’s the billio- dollar question.”
HCI once held shares in renewable US energy group Montauk, which focused on extracting methane gas from landfills and animal waste, so it has experience in long-term capital-intensive projects.
HCI is not saying much and in February referred questions on the oilfield to Impact.
HCI, which has investments in gambling, eMedia television, transport, properties, coal and hospitality, has previously faced off with environmentalists on its energy and oil interests.
After Shell’s five-month seismic exploration for natural gas off SA’s Eastern Cape coast was interdicted in December, Copelyn, whose company is Shell’s SA partner, wrote a letter criticising fears around the seismic survey.
He called concerns that seismic surveys were dangerous for sea life and the environment “poppycock”.
He also argued that fossil fuels are required by SA if it is to have a stable and affordable electricity supply.
Copelyn wrote: “We live in a world where it is not possible to ignore the realities of our country’s total dependence on fossil fuels, mainly coal, for its base electricity and oil for its transport and petrochemical industries.”
He said SA should take advantage of its resources to create affordable fuel and electricity.
“Aspiring to be the only country in the world that sits on valuable resources it needs, but refuses to develop, is a luxury we simply cannot afford.”
Shell was denied the right to appeal the interdict against its exploration in March.
Impact is exploring multiple deep-sea areas for oil and natural gas on the west coast of Africa as well as Namibia and SA.
By the JSE’s close on Tuesday, HCI’s share price had gained 6.55% to R124.53. It has risen more than 55% since the February announcement.
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