#JustIn: Shell intensifies hunt for Namibian oil

Shell has submitted proposals to conduct drilling activities for up to ten new exploration and appraisal wells in Namibia&#039;s offshore waters after discovering light oil in three locations.This is according to a report published by the energy website, UpstreamOnline.In February last year, Shell successfully completed drilling its first exploration well (Graff-1) in PEL 39, confirming a working petroleum system and the presence of light oil. Shortly thereafter, Shell in April announced a second Orange Basin discovery, also in PEL 39, with the La Rona-1 well.Last month, the global energy group announced a light oil discovery in the Jonker-1X deep-water exploration well, also located in the Orange Basin and about 270 km off the coast of Namibia.“We are delighted to announce this third oil discovery after the success of the Graff-1X and Venus-1X discoveries by Shell and TotalEnergies in 2022. This discovery has proven the exciting and world-class potential of the deep-water Orange Basin,” the ministry of mines and energy commented on Jonker-1."The Orange Basin has quickly become one of the most exciting hydrocarbon plays in the region, as the discoveries have been rumoured to be among the largest African crude discoveries in recent decades," Cirrus Capital said in a report last year.BillionsShould Shell’s and TotalEnergies’ discoveries be commercially viable, investment flows into Namibia could be around US$29 billion, the international consultancy firm Wood Mackenzie estimates. At the current exchange rate, it would be more N$500 billion, about 2½ times Namibia’s nominal gross domestic product (GDP) last year.According to Wood Mackenzie, the Shell and TotalEnergies discoveries could potentially deliver about 6.5 billion barrels of oil, resulting in some N$60 billion in royalties and taxes flowing into state coffers annually.Further developmentHowever, even if any of the discoveries prove commercially viable, there is no guarantee of further development, Cirrus emphasised in its report.“We believe that even if commercial viability is announced in the near term, production is at best six to eight years out. Nonetheless, confirmation of a commercial discovery would result in substantial investment inflows and a boost to economic growth even in the nearer term," the analysts said."With growing political uncertainty, firms [especially the majors] will want assurance that any potential changes in political leadership will not adversely impact their investment. Given recent scandals within the ministry of mines and energy, and natural resources in general after the Fishrot exposé, increased transparency is warranted," Cirrus said.The National Petroleum Corporation of Namibia (Namcor) is currently embroiled in controversy following the suspension of its managing director, Immanuel Mulunga.

#JustIn: Shell intensifies hunt for Namibian oil

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Republikein 2025-03-06

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