BP PLC (BP.LN) will invest around $50 million in a project to explore for oil and gas off the coast of Namibia , the U.K. major's latest frontier foray as it implements its new strategy of increasingly seeking out untapped resource opportunities.

Independent exploration and production company Chariot Oil & Gas Limited (CHAR.LN) said Monday it sold half of its 50% stake in an oil exploration block off the coast of the southwest African nation to BP, which will cover the costs of drilling. The total consideration of the deal is around $50 million, according to Chariot Chief Executive Paul Welch.

Namibia , which has yet to yield a single commercial hydrocarbon discovery, may hold up to 16 billion barrels of oil, Chariot said, citing its early seismic data analysis. The uranium-rich country has similar geological formations to Brazil 's Santos basin, a huge resource that has encouraged explorers to look more closely at prospects along the southwest African coastline.

As part of the deal, BP has committed to cover Chariot's cost of drilling the first exploration well, as well as past costs incurred. Chariot didn't say how much it expects to receive. BP declined to detail how much it will pay for the stake, saying it was "commercially confidential."

"It's a small stake in one block at the moment," said a BP spokesman, who added that there haven't yet been any commercial hydrocarbon discoveries in Namibia . He said BP would initially carry out some additional seismic surveys of the area.

BP has said BP intends to increase its focus on exploration, with spending set to double in the next few years, as the company looks to replace a higher proportion of its reserves with new discoveries.

Analyst Andrew McGreary of Northlands Capital Partners said the deal was a "positive indication of the interest of the majors in the region."

The 2714A block is located in the Orange Basin off the Namibia coast and covers an area of 5,481 square kilometers. Brazil 's Petroleo Brasileiro SA (PBR), the owner of the other 50% stake, will be the lead operator, Chariot said.

The agreement is subject to approval by of the Ministry of Mines and Energy in Namibia .

AIM-listed Chariot's shares soared following the news, while BP's tracked the broader FTSE 100 index lower. At 1103 GMT, BP was down 6 pence, or 1.3%, at 405p, while Chariot traded up eight pence, or 6.6%, at 128p.

Διαβάστε ακόμα