Eco Atlantic Oil looking for new partner after Tullow pulls plug on joint venture in Namibia
Oil and gas exploration company, Eco Atlantic Oil and Gas Ltd stated that it has received a formal notice from Tullow Namibia Limited that it is unable to either enter into the Second Renewal Period under the PEL30 license or to make a financial commitment to drilling on the block.
In accordance with the Joint Venture 2014 farm-out agreement, Tullow is required to make a financial commitment to drill one exploration well before renewing its interest in the Second Renewal Period in the first quarter of 2019. In the event that a well was not drilled having entered the Second Renewal Period, the agreement obligates Eco to a significant penalty.
“Tullow’s decision is as a result of its own proposed farm-in partner, ONGC, as announced on 21 November 2017, now withdrawing from their agreement with Tullow on PEL30 and so due to exploration budget prioritisation, Tullow will now transfer their 25% working interest to Eco,” the statement read.
As a result, Eco has had the 1,100 km2 3D survey, full processing and interpretation and past costs all paid for by Tullow and it will now receive back Tullow’s Working Interest.
On completion of the transfer, Eco will hold a 57.5% Working Interest in the Cooper Block.
Meanwhile with more than three and a half years still to drill on the Cooper Block under the terms of the licence, and with a drill-ready target, the company has already started discussions with potential farm-in partners to replace Tullow and to jointly drill the Osprey Prospect.
Eco’s other partner on the Cooper Block, Azinam Ltd, has previously announced that it would like to proceed with further exploration of the block, including the drilling of a well.
Gil Holzman, the Chief Executive of Eco said in the statement, “We thank Tullow for our four years’ carried partnership on the Cooper Block and for advancing it through extensive 3D studies, interpretation, and targets selection all the way to now being drill-ready.”
“As partners on both sides of the Atlantic, we understand Tullow’s drilling budget prioritisation. This reflects a shift in both Tullow’s and Eco’s priorities to Guyana which clearly remains the focus for both partners, as recently announced by senior executives of both companies. The opportunity the companies share on the Orinduik Block in Guyana is outstanding with much lower near-term risk following the amazing success of ExxonMobil on the adjacent Stabroek Block and our own 3D data interpretation. We expect 2019 to be a significant and defining year for Eco,” he added.
Colin Kinley, COO of Eco said they are discussing the Cooper Block with other potential industry partners as there are many parties currently seeking additional opportunities in the Walvis Basin as Exxon, Total, and the other majors are now moving into the area as exploration matures.
