- ExxonMobil said on 24 April it will increase its exploration range in Namibia, adding about 28,000 square kilometres. It plans to start exploration this year.
- Meanwhile, Wood MacKenzie has said that Total’s Venus-1 well offshore Namibia, which is due to spud this year and is billed as Africa’s deepest ever, has the potential to throw up 2019’s largest discovery.
- Smaller players such as Tower Resources and Eco Atlantic Oil & Gas are also active offshore Namibia.
The focus of energy investment in Africa is set to shift, says Andrew Sekandi, an investment adviser at Alpha Sierra in London.
- He anticipates that attention will shift downstream to improved storage, transportation and refining capacity in coming years.
- Sekandi expects “slightly less interest in mature and legacy oilfields and more interest in frontier markets”.
- Namibia is showing geological promise and is attracting increasing attention from majors and juniors, Sekandi says.
Standard Bank says the investment needed to bring new African discoveries over the past decade in countries such as Ghana, Niger and Mozambique on stream will add further impetus to Africa’s oil consumption, which already exceeds the continent’s refinery output. Namibia, meanwhile, has remained historically under-explored. Sekandi estimates that only 16 wells have been drilled over the past half century, more than half of them in the past four years.
Seismically, Namibia may be analogous to the pre-salt fields offshore Brazil which have crude reserves amounting to 16bn barrels, according to Sekandi:
- Brazilian petroleum giant Petrobras first discovered pre-salt oil reserves in the Santos Basin in 2006, and drew the first oil in 2008. Successive discoveries have continued since.
Researchers led by Dr. Marcio Rocha Mello have argued that analysis of oil and condensates from Kudu and other wells proves that the Orange Basin off Namibia has similar source rocks to its northern neighbours, as well as Brazil, making the prospect of Namibian oil production a realistic one.
- Namibia has no proven oil reserves, leading explorers in the region to favour Angola.
- The only existing commercially sized hydrocarbons discovery, the Kudu gas field, is still undeveloped after being discovered in the 1970s by Chevron.
Viability has so far remained out of reach. In September 2018, Tullow abandoned a well off the coast of Namibia, saying that the hydrocarbons found were non-commercial.
- Still, Tullow’s exploration director, Angus McCoss, said that gas readings “support the concept that there is a working oil system in the area”.
- Namcor, the state-owned oil and gas explorer, said in 2018 that 48 offshore and onshore prospecting licences have been issued to Namibian and international oil and gas explorers.
- Eco Atlantic plans to start drilling between the third quarter of this year and the first quarter of 2020.
If oil is found in commercial quantities, Namibia’s low population density means it is likely to be able to offer better fiscal terms than others in Africa. The country has a population of 2.4 million people, compared with 28.2 million in Ghana.
Smaller explorers have drawn a blank so far, but renewed interest from ExxonMobil and Total, plus a favourable price outlook, suggest that Namibia’s time may finally be approaching.
Understand Africa's tomorrow... today
We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.View subscription options