WINDHOEK, Namibia (XOL Africa) — Namibian independent oil and gas company Custos Energy has agreed to transfer its subsidiary’s 10% participating interest in Petroleum Exploration License 90, or PEL 90, to Chevron in a deal that will provide the company with $11 million in cash at completion while preserving exposure to potential future exploration and production revenues.
Under the agreement between Trago Energy, a wholly owned subsidiary of Custos, and Harmattan Energy Limited, a Chevron affiliate, Trago will transfer its entire participating interest in PEL 90 to Chevron in exchange for the upfront payment and additional contingent consideration tied to appraisal and production milestones.
The contingent consideration includes revenues associated with commercial production, which Custos said is currently estimated at between 1.5 million and 2.5 million barrels of oil, depending on commodity price assumptions.
The transaction remains subject to governmental, regulatory and third-party approvals.
For Custos, the deal represents a shift from direct participation in the license toward a structure that reduces its exposure to future funding requirements and exploration capital while retaining potential upside from the block’s development.
The agreement also comes ahead of planned exploration activity on PEL 90, including the Nabba-1X exploration well.
“As a local company that has been a participant in PEL 90 since its award in 2018, we have been a proud champion of its potential,” said Knowledge Katti, chairman and CEO of Custos Energy.
“We were pleased to be able to bring Chevron to Namibia in 2022 as the operator of this marquee license, as well as more recently seeing Qatar Energy and Equinor join the license as partners,” Katti said.
“This transaction allows us to continue our exposure to the very bright future ahead, but in a more capital and risk efficient manner. It demonstrates the creativity of local Namibian companies and their ongoing role in attracting international resources to be invested for the benefit of all Namibians,” he added.
Custos to invest N$10 million in UNAM campus
As part of the broader transaction, Custos said it will contribute N$10 million through the Knowledge Katti Foundation to the University of Namibia Foundation for construction of UNAM’s new campus in Walvis Bay.
The contribution is expected to be made after the necessary approvals are secured and the Chevron transaction is completed.
The investment builds on the Knowledge Katti Foundation’s existing education initiatives. The foundation said it has already supported more than 120 Namibian students through university education.
“Namibia’s greatest resource is its young people,” Katti said.
“As a son of Walvis Bay, I am proud that we can help bring UNAM’s first campus to the town. It is a strategic investment that will allow young people from all over Namibia to study close to where the industry is based.”
The proposed campus comes as Namibia seeks to strengthen the connection between its expanding natural resources sector and local skills development.
PEL 90 draws major international players
PEL 90 has emerged as one of Namibia’s key offshore exploration areas, attracting international energy companies as the country develops its petroleum sector.
Custos said it has held a stake in the license since its award in 2018 and helped bring Chevron into the project as operator in 2022. QatarEnergy and Equinor have subsequently joined the license as partners.
The transfer will give Chevron an increased participating interest while Custos moves to a position that limits its direct capital and funding exposure to future activities.
Custos said the structure allows it to maintain economic exposure to the potential development of PEL 90 while avoiding the full financial burden associated with exploration and appraisal activities.
Custos Energy was founded more than a decade ago by Katti and focuses on attracting international investment and technical expertise to Namibia’s offshore oil and gas industry.
The company also holds a 10% interest in PEL 83, which contains the Mopane discoveries.
For Namibia, the transaction underscores the growing role of domestic energy companies in partnering with major international oil and gas firms as the country seeks to develop its offshore petroleum resources while increasing local participation in the sector.
Editor: Gabriel Ani
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