Oil sector upbeat as new discoveries are made

While Namibia expects the announcement of concrete outcomes from the ongoing oil drilling off the country’s coast during 2024, a number of discoveries have been announced already this year.

While Shell has discovered at least 500 million barrels of recoverable oil in Namibia’s Orange Basin, Galp Energies has confirmed a second column of high-quality light oil in the Mopane well and Pancontinental Energy is upbeat about oil discovery prospects after Galp’s oil find.

According to miningandenergy.com, petroleum commissioner Maggy Shino says Shell Namibia has found 200 million barrels at Graf-1 and another 300 million barrels at Jonker-1X.

She also estimated that TotalEnergies holds two billion barrels of recoverable oil at its Venus discovery.

“We have commenced appraisal work on the Graf-1 and Venus-1 discoveries, and the initial results have been very encouraging,” she said.

“We are making ongoing evaluations to determine the exact size of these fields and continuously improve our estimates to determine commerciality.”

Shell has made four discoveries on Petroleum Exploration Licence (PEL) 39 – Graff, Jonker, La Rona and Lesedi, while TotalEnergies drilled its Venus discovery on PEL 56.

Galp operates PEL 83 with an 80% interest, while the National Petroleum Corporation of Namibia (Namcor) holds 10% and Custos Energy, half-owned by Sintana, has a 10% stake.

Custos chairperson and chief executive Knowledge Katti said the continuing success of the initial exploration campaign, including a second light discovery at Mopane-1X, further demonstrates the scope and potential of PEL 83.

“We extend our further congratulations to our partners Galp and Namcor on this second discovery. This is another significant milestone for Custos positioning us for further growth and continued success underpinned by our unmatched position in the heart of the basin,” he said.

Shino said the announcement of the additional Galp discovery is further testament to the hard work and dedication of the partner involved, as well as another demonstration of the potential for further growth in Namibia’s oil industry.

“With this discovery, we are one step closer to harnessing the full potential of this campaign. We wish Galp and its partners Custos Energy and Namcor success with the remaining drilling campaign,” she said.

Shakwa Nyambe, the founder and MD of the law firm SNC Incorporated, which specialises in energy and natural resources matters, said the recent oil and gas discoveries by Galp, as well as the earlier discoveries by Shell and Total Energies in Namibia, have sparked a global interest in Namibia’s hydrocarbon potential.

“I foresee a high number of mergers and acquisitions within Namibia’s upstream oil and gas sector in the next few years, as junior and medium size oil companies try to share the risk.

I also foresee more major oil and gas companies acquiring oil and gas assets in Namibia, either by farming in existing petroleum blocks or applying for their own petroleum blocks,” he said.

Nyambe said the oil and gas discoveries have also turned Namibia’s Orange Basin into a global hotspot for exploration activities, with multiple drilling rigs operating off the country’s shores.

Meanwhile, Pancontinental Energy is optimistic about the prospects of discovering oil in the Orange Basin after Galp recently reported a significant discovery on its PEL 83, immediately south of Pancontinental’s PEL 87.

“Galp’s PEL 83 prospects are thought by Pancontinental to reside in a very similar setting to the PEL 87 Saturn feature, with the reservoir sands being of comparable age and sharing the same oil source formation (Kudu Oil Shale).

Pancontinental regards the Mopane-1X result as extremely positive for PEL 87 prospectively,” said the listed exploration company.

Pancontinental has announced that the Ministry of Mines and Energy has approved the extension of the PEL 87 permit into the first renewal exploration period, running from 23 January 2024 to 22 January 2026.

Pancontinental executive director Barry Rushworth commented: “The prolific Namibian Orange Basin continues to deliver, and I believe Pancontinental continues to be exceedingly well-placed for an exciting 2024 and beyond.”

Nyambe said the extension of Pancontinental’s exploration licence into the first renewal exploration period signifies a continued commitment to exploration efforts in Namibia and the potential of the industry, further contributing to the promising oil and gas landscape of the country.

– email: matthew@namibian.com