9TH AFRICA OIL

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NOT AN OFFICIAL UNCTAD RECORD
9TH AFRICA OIL GAS, TRADE FINANCE
CONFERENCE AN UPDATE ON THE KUDU GAS FIELD
MAPUTO 3 JUNE 2005 KEVIN STALLBOM BUSINESS
UNIT MANAGER KUDU
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Kudu history key milestones

• Discovered 1974 by Chevron/Regent/Soekor
• Two wells drilled by Swakor 1987-88
• Licence awarded 1993 Shell (75), Energy Africa
  (25)
• Energy Africa farm-out 15 to Texaco
• Petroleum field declared 1997
• Drilled four wells
• Shell relinquished 2002 - ChevronTexaco (60
  operatorship), Energy Africa (40)
• ChevronTexaco relinquished Nov 2003 Energy
  Africa 100
• Dec 2003 - Energy Africa 90, Namcor 10
• Tullow Oil acquires Energy Africa May 2004

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Kudu Licence Area Block 2814A

• 170 km to Oranjemund
• 800 km to Windhoek
• 800km to Cape Town
• Logistically remote area
• Development overlaps Namdeb diamond mining area

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Kudu Project Scheme
Gas Sales Agreement
Domestic sales in Namibia
Power Purchase Agreement
Kudu Upstream JV Energy Africa Kudu Limited
(90) Namcor (10) Partners
Nampower
Kudu Power Station Company Nampower (100)
Partners (?)
Power Purchase Agreement
Eskom - export sales to RSA
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What have we done differently

• Initiated a fresh look at the broader
  development options
• Recognized current window of opportunity in power
  market
• Focused development on proven GIIP only
  de-linked Phase 1 gas-to-power project from
  upside development opportunities
• Established open book co-operative approach
  with downstream parties

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Co-operative management structure
Kudu Steering Group Co-ordination, consultation,
guidance, consensus (as per MOU/LOI)
Distinct but integrated elements of same project
Downstream Kudu Power Station Company Nampower Esk
om Partners (?) Relationship still to be defined
Upstream Petroleum Agreement License 005, Area
2814A JOA Energy Africa Namcor
Partners Relationship defined
milestones
Joint Development Agreement
Final Investment Decision
First power
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Power demand growth in SADC
Courtesy

• The Southern Africa Power Pool (SAPP)
  experiencing diminishing generation surplus
  capacity in the region caused by
• increasing power demand at a rate of three
  percent per year (1200MW) in the last six years
• If no new generation project then in 2007, the
  SAPP will run out of generation surplus capacity.
• There has been no significant investment in
  generation in the last 10-years, despite the rise
  in power demand.

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Power stations in Namibia
Courtesy
Ruacana Hydro, Run-of-the-river
Van Eck Coal fired,Standby
Paratus Diesel HFOStandby
Katima Diesel, not connected to rest of Grid
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Namibian transmission backbone
ANGOLA
Courtesy
ZAMBIA
Ruacana
Otjikoto
Otjikoto
Otjikoto
Gerus
BOTSWANA
Omburu
Rössing
2
van Eck
Auas
Walmund
Atlantic Ocean
2
Hardap
Red 400KV
Blue 330 KV
Yellow - 220 KV
2
Kokerboom
Kokerboom
REPUBLIC OF SOUTH AFRICA
Obib
2
Aries
Aggeneis
To Hydra
To Koeberg
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Kudu Power Station impact on region

• Timing, availability of new generation in 2009
• Strengthening of regional grid
• Reduction in transmission losses
• Diversification of energy mix portfolio,
  especially to encourage the introduction of
  natural gas and to increase the role of renewable
  energy sources
• Socio-economic injection
• Development of Namibias gas resources

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Progress made on Kudu project (1)

• Joint Development Agreement
• July 2004 - Energy Africa, Namcor, Nampower MOU
  with Eskom
• Commercial Agreements
• Draft Heads of Agreement tabled and negotiation
  process begun
• Power station site pipeline route
• Pipeline route dependent on power station site
• Conclusion on discussions with Namdeb expected
  soon

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Kudu Power Station Configuration
Courtesy

• 2 x 400 MW (nominal) Single Shaft Combine Cycle
  Gas and Steam Turbines
• Mechanical draft evaporative cooling towers with
  sea water make-up

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Kudu Power Station Location
Uubvley
25 km
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Pipeline route options
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Progress made on Kudu project - (2)

• FEED study confirmation of project feasibility
• Development concept selected - protects schedule
  and budget
• FEED study contract awarded to John Wood Group,
  results due July 2005
• EIA approved
• Reprocessing 1993/96 3-D seismic survey
• Contract awarded to CGG
• Completion October 2005

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Kudu field area

• WATER DEPTH 170m
• RESERVOIR DEPTH 4400mbmsl
• HIGH PRESSURE 536 bar
• HIGH TEMPERATURE 158C
• DRY/SWEET GAS 96 CH4
• 2-3 bbls/MMscf CONDENSATE
• DETERMINISTIC GIIP (Tscf)
• EA GCA
• PROVED 1.38 1.45
• PROBABLE 3.28 2.72
• POSSIBLE 9.92 7.12

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Kudu development plan

• Robust and simple
• Proven technology
• Realistic schedule
• Potential to realise the upside
• Commercially viable

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Production profile
Total well capacity
Matched production profile
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Pre-feasibility development concept
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FEED development concept selection
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Subsea Umbilical Option
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Subsea Control Buoy
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Katabatic winds aerosol sand plumes

• Further technical challenge for onshore
  facilities
• Avoided offshore by subsea development

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Beyond Phase1 Kudu Gas-to-Power..

• Phase 1 800MW
• gas-to-power project
• 2004 2005
• seismic reprocessing
• FEED study
• GSA PPA
• Financing
• Partners
• 2006 2008
• Construction
• 2009
• production

• Post - Phase 1options
• Additional gas-to-power
• Liquefied Natural Gas, Gas-To-Liquids, or
  Compressed Natural Gas
• Gas export to South Africa

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Current post-Phase 1 activities

• Complete planning for drilling two wells in 2006
  to confirm the upside potential in greater Kudu
  field area. Drilling timing dependent on
• Rig and materials availability
• Partners (?)
• High level techno-economic evaluation of the
  earlier work on the three post-Phase1 options and
  prepare work program for further investigation
• Preparing to bring in new partners - probably
  during second half 2005

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In summary-

• Phase1 - 800MW gas-to-power project progressing
  well with final investment decision expected
  early 2006
• Post - Phase1 activities for evaluation of /- 8
  Tscf GIIP upside
• Preparation to drill two wells in 2006
• Evaluating development options for three
  scenarios
• Additional gas-to-power
• LNG / GTL / CNG
• Gas export to South Africa
• Preparing to bring in additional partners during
  second half 2005