Shell, QatarEnergy make new oil discovery off Namibia

Shell and state-owned QatarEnergy (QE) have made a new oil discovery at a deepwater exploration well around 270km offshore Namibia, the country's third in just over a year.

The "light oil" discovery in the PEL-39 licence in the Orange Basin offshore southern Namibia was announced by QE, which holds a 45pc non-operating interest in the block, and Namibia's state-owned Namcor, which holds a 10pc stake. Shell, which operates the licence with a 45pc share, has yet to make an announcement.

QE said the discovery was made at the Jonker-1X deepwater well, which was drilled in water depths of around 2,200m. Drilling work began at the well in December and concluded several days ago, QE said. Neither QE nor Namcor have issued a reserve estimate, saying further appraisal work is needed still to determine the size and potential of the find.

The news cements Namibia's reputation as a frontier exploration hotspot. It is the third oil discovery in the space of a year. The other two were also in the Orange Basin, which extends from southern Namibia to the east coast of South Africa. The same consortium reported a discovery at the Graff-1 well, also in the PEL-39 licence, in early February 2022. A different consortium - comprising TotalEnergies, QE, UK-based independent Impact Oil and Gas and Namcor, announced a separate light oil discovery at the Venus 1-X well a few weeks later in the PEL-56 licence.

The Jonker find comes less than two weeks after TotalEnergies said it would begin a multi-well drilling campaign to appraise the Venus discovery. TotalEnergies said it plans to spend half of its 2023 exploration budget in Namibia. The company has previously indicated that Venus could hold at least 5bn bl of oil equivalent (boe) of recoverable oil and gas. Consultancy Wood Mackenzie has estimated it could hold as much as 6bn bl of oil, and possibly double that if the appraisal drilling yields positive results.

TotalEnergies holds a 40pc operating interest in the PEL-56 licence, with QE, Impact Oil and Gas and Namcor holding 30pc, 20pc and 10pc stakes, respectively. If successful, the Venus drilling campaign will result in two potentially fully appraised early production centres, Impact Oil and Gas said.

By Nader Itayim