Azule's role in Rhino's oil project
As Rhino Resources moves its petroleum exploration licence (PEL) 85 exploration campaign towards appraisal and potential development, the role of its largest partner, Azule Energy, is becoming increasingly important.
Rhino operates the licence and holds a 42.5% interest. Azule holds the same stake, while the National Petroleum Corporation (NAMCOR) has 10% and Korres Investments 5%. Under the farm-out agreement completed in 2024, Azule has an option to become operator during the development phase. That provision could become significant if the partners decide to develop the Capricornus oil discovery.
The skills required to explore for oil differ from those required to develop a deepwater production project. Exploration involves seismic surveys, geological interpretation and drilling wells to establish whether hydrocarbons are present. Development requires a much larger commitment of capital and involves engineering, subsea infrastructure, production facilities, procurement and project management over several years.
Azule has experience in this area through its operations in Angola. In June 2026, the company and its partners took final investment decision on the $5.1 billion Greater PAJ project offshore Angola. The project is expected to recover about 252 million barrels and will involve 17 wells connected to a new FPSO with a production capacity of 95 000 barrels per day. First oil is expected in the first half of 2029. The project is not directly comparable with PEL 85. The fields, reservoir characteristics, infrastructure requirements and economics are different.
It does, however, demonstrate the type of project-execution experience Azule can bring to an offshore development. The company's involvement in Namibia is also becoming more established. Azule has set up a permanent presence in the country and strengthened its local management team. PEL 85 remains its main focus in Namibia.
That experience gives Rhino access to a partner accustomed to large-scale offshore developments, while PEL 85 gives Azule exposure to an emerging oil province with several discoveries and further exploration potential. The balance of the partnership could become more important as the licence progresses.
Rhino remains operator during the exploration phase and retains its 42.5% interest. Azule's option to take operatorship would only become relevant if the licence progresses into development and the company chooses to exercise it.
No decision on that change has been announced.
Before the partners reach that point, they still need a clearer understanding of the recoverable resource, the development concept and the project's economics.
Further appraisal of Capricornus and evaluation of the wider PEL 85 resource base will help determine whether the discoveries can support the investment required for offshore production.
Rhino's immediate task is to establish how much of the oil and gas it has found can ultimately be recovered.
Azule, meanwhile, has the experience that could become critical if those volumes justify a major development.
