- Shell has burnt around US$400 million on exploration of an offshore oil discovery in Namibia.
- The company has found the oil discovery to be commercially unviable for development.
- The write down relates specifically to the offshore block PEL 39 in the Orange Basin close to South Africa which was discovered by Shell and its partners, QatarEnergy and the national oil company of Namibia, in 2022.
Shell’s announcement came as a setback for Namibia that was looking to establish itself as a crude producer.
Shell drilled nine wells in the license in the past three years but found significant geological and technical challenges that hindered the development of these resources.
Related news: GALP will need a significant partner to develop their Namibia oil and gas concession
Shell’s CEO Wael Sawan mentioned in an update that the development of the acreage would be extremely challenging. The lower permeability of the rock in this region made the process of hydrocarbon extraction significantly difficult. Furthermore, the company noted that these discoveries have a high proportion of natural gas, making the extraction process even more complicated.
TotalEnergies announced a significant find around the same time as Shell in Namibia. Their concession relates to block 2913B which lies next to the Shell’s failed PEL 39 block. Read more
Link to Namibia’s offshore hydrocarbons map HERE
Related news: TotalEnergies pulls out of gas discoveries in South Africa
Author: Bryan Groenendaal
