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(Sharecast News) - Global Petroleum updated the market on its operations in Namibia and Italy on Wednesday, after the granting of a one-year extension to the initial exploration period of PEL 94 In Namibia until September 2023.
The AIM-traded firm noted the confirmation by TotalEnergies that it was planning to drill an appraisal well on the Venus discovery in the third quarter.
Following that, it was also reported that TotalEnergies was planning to test both the appraisal well and the original discovery well, Venus-1X.
Global also noted the completion by Shell of the La Rona-1 well, which was drilled immediately following the Graff-1 discovery well and close to it.
The Shell wells are located - as is Venus-1X - in the Orange Basin, southern Namibia.
"Although no formal announcement has been made by Shell, reports suggest that Graff and La Rona have discovered significant volumes of oil and gas in two reservoirs," the board said.
"Shell has stated that it will drill more appraisal and exploration wells in order to prove commerciality and to design the optimal development plan.
"Unsurprisingly, interest in Namibian offshore exploration has risen unprecedentedly - a development which has become evident to Global in the course of its farmout of PEL 94, and also to industry observers generally."
The board said that a possible outcome of the TotalEnergies and Shell discoveries was that companies, particularly potential new entrants, were taking "significant time" to evaluate the geology and petroleum systems offshore Namibia.
"Whilst focus is understandably intense in the Orange Basin - especially in the region of the discoveries - Global's view is that oil-prone opportunities there are both limited and likely to be very expensive.
"The company believes that the Walvis Basin, where PEL 94 is situated, also has the potential to be extremely successful, but has the advantage of much shallower water depths generally than the discoveries in the south.
"Global believes that there is commonality of both source and reservoir between the two discoveries in the Orange Basin and PEL 94."
A presentation given by the firm at a recent industry workshop in Namibia on the mapping of the source rock and migration of oil and gas from it was "well-received" and generated additional interest in the PEL 94 data room process.
In Italy, meanwhile, the company said the 'Plan for Sustainable Energy Transition of Appropriate Areas' came into effect in the country in February.
Global and its advisers had subsequently undertaken a detailed study of the plan, with particular reference to its four exploration permit applications in the Southern Adriatic.
It said a "key structural component" of the plan was the provision that in future only exploration for gas, as opposed to oil, would be permitted in Italy, both onshore and offshore.
"With specific regard to the applications, the plan also provides that certain sections of the application areas as previously constituted are deemed to be excluded, a process referred to by the relevant authorities as 're-perimeterisation'," the board said.
"Notwithstanding the company's reservations as to the practicality of gas-only exploration - a reservation which Global believes is widely shared within the energy industry and beyond - the company provided the Italian authorities technical evidence of the gas prospectivity within the reduced application areas, also thereby accepting the re-perimeterisation of those areas.
"Having considered the communications from the company, the Italian Ministry of Ecological Transition has now informed Global that the company's exploration objectives in the applications are in compliance with the provisions of the Plan, and that there is no impediment to the continuation of the process - towards eventual award of the exploration permits."
Global said it had decided to continue the process, which would include re-qualification in accordance with technical and financial criteria.
"Regarding Italy, our current thinking is that it is worth pressing on with the process, notwithstanding our reservations," said chief executive officer Peter Hill.
"Apart from the great amount time and effort which the team at Global have put into the applications over the years, plus the fact that we have won all of the legal cases brought against us, from a wider strategic perspective we note that since the substance of the hydrocarbon plan was finalised by the Italian government in late 2021, the energy supply situation in Italy and in Europe generally has altered dramatically."
In Namibia, Hill said that although companies would "naturally" be looking first at the Orange Basin, the firm was encouraged by the quality of the parties that had shown interest in its farmout of PEL 94.
"Our analysis is that there are very few attractive, available blocks in the Orange Basin and there is great competition for them.
"We think that Global holds one of the most prospective blocks in the Namibian offshore for the reasons we set out in this announcement, and we firmly believe that our patience will pay off."
At 1251 BST, shares in Global Petroleum were down 9.09% at 0.4p.
Reporting by Josh White at Sharecast.com.
