Namibia’s Mines and Energy Ministry has downplayed the impact of energy company Shell recent $400-million write-down on its offshore oil discoveries, stating that the country it remains committed to developing its hydrocarbon discoveries.
“We are dedicated to progressing these opportunities with the right partner and right investment commitment,” the government stated on Friday, adding that Shell’s decision to write down the discoveries would not significantly impact Namibia’s oil and gas development.
Shell announced the write-down following its determination that the oil and gas resources in offshore block PEL39, discovered in 2022, are not currently viable for commercial development owing to technical and geological difficulties in extracting the resources.
The company has been drilling nine wells over the licence in the last three years.
Shell and its partners, QatarEnergy and Namibia’s national oil company Namcor, nonetheless continued to pursue further exploration opportunities in the 12 000 km2 PEL39 licence area.
The Ministry of Mines and Energy said that while initial assessments of some of the subsurface parameters indicated challenges related to subsurface complexities and reservoir quality, there was significant potential for improvement as exploration and technical analysis continued.
It added that advances in technology, coupled with more geological and geophysical studies, were expected to provide deeper insights and unlock the full potential of these resources.
“We are positive that the remaining potential of PEL39 and other exploration campaigns will translate into commercial developments. Shell’s discoveries in PEL39 represent just some of the many exploration milestones witnessed offshore Namibia since 2022,” the Ministry explained.
It pointed out that TotalEnergies, for example, was making progress with a multi-well appraisal and exploration drilling campaign in Block 2913B, which was within licence number PEL56.
TotalEnergies plans to make a final investment decision this year, with first oil targeted in 2029.
The Ministry also deems the Mopane complex as another promising opportunity for hydrocarbon development, as well discoveries within the Walvis Basin.
“While the Shell write-down is unfortunate, the Ministry of Mines and Energy believe that we have barely begun to scratch the surface of the country’s offshore resources.”
The Ministry confirmed that government would continue working with dedicated companies to develop these resources, reveal more commercial opportunities and delivering first oil production in the near future.