Namibia Tempers Oil Expectations After Latest Drilling Campaigns

Last updated: 2025/02/19 at 3:04 PM

Editorial Team 4 weeks ago

Namibia is taking a extra cautious view on its long-term oil prospects after the newest exploration wells failed so as to add to a string of discoveries that began about three years in the past.

Chevron Corp. and TotalEnergies SE are amongst explorers that reported drilling duds in latest months, whereas Galp Energia SGPS SA and Rhino Assets this week every mentioned they’re finding out the outcomes of their very own campaigns. Final month, Shell Plc mentioned it wrote off about $400 million of non-viable wells.

When TotalEnergies and Shell made offshore discoveries there in 2022, the sparsely populated African nation aspired to develop its sources rapidly earlier than a worldwide vitality transition lowers demand for crude. However latest outcomes from offshore fields have introduced on a extra measured view, and central financial institution Governor Johannes !Gawaxab says expectations must be dialed again.

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“I feel the hype was too excessive, proper?” !Gawaxab mentioned final week. “So we have to decrease expectations and wait till we’ve obtained a last funding determination made by one of many oil majors that they’re going to develop the fields.”

Nonetheless, TotalEnergies expects to drill extra wells by way of subsequent 12 months when it plans to make a last funding determination on its Venus venture that will produce 150,000 barrels a day, Chief Government Officer Patrick Pouyanne mentioned earlier this month in an earnings presentation. Different explorers with blocks have outlined extra exercise.

“The continued dedication of business gamers to the Namibian offshore sector is a powerful sign that exploration efforts will persist, with the potential for additional discoveries within the close to future,” Namibia’s state-owned oil firm Namcor mentioned in response to questions. “Exploration is an inherently high-risk, high-reward exercise.”

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