Home Fossil Energy Namibia’s Orange Basin still oil-rich but Shell’s discovery deemed ‘commercially unfeasible’
UK-headquartered energy giant Shell has decided to write down $400 million, citing technical and geological difficulties encountered at the petroleum exploration license (PEL) 39, as its oil discovery in the Orange Basin off the coast of Namibia cannot be confirmed for commercial development at this point.
Shell used Deepsea Bollsta rig, formerly known as West Bollsta for its drilling campaign in Namibia’s Orange Basin; Source: Odfjell Drilling
Since the initial discovery at the Graff-1X well in 2022, Shell has drilled eight wells, including La Rona-1, Jonker-1, Graff-1A, Lesedi-1X, Cullinan-1X, Jonker-1A, Jonker-2A, and Enigma-1X, with various of these wells encountering hydrocarbons in PEL 39, which is situated 250 kilometers in deep offshore acreage, comprising an area of more than 12,000 square kilometers.
According to Namibia’s Ministry of Mines and Energy, Shell has run into technical and geological difficulties in PEL 39, leading to the determination that discoveries in some drilled wells were not viable for commercial development. As a result, the firm will write down $400 million on an oil discovery made in this license.
While initial assessments of some subsurface parameters indicated challenges related to subsurface complexities and reservoir quality, the ministry sees significant potential for improvement as exploration and technical analysis go on, with advances in technology, coupled with further geological and geophysical studies, anticipated to provide deeper insights and unlock the full potential of these resources.
“The collective discoveries from the nine drilled wells amount to significant volumes of hydrocarbons accumulations. The government of Namibia remains committed to developing these discoveries, which are believed to be commercially viable. We are dedicated to progressing these opportunities with the right partner and right investment commitment,” outlined Namibia’s Ministry of Mines and Energy.
Shell, together with partners, QatarEnergy and Namcor, will continue to explore potential commercial pathways for development while actively looking for further exploration opportunities in PEL 39. The Namibian ministry claims that the country still offers substantial potential in the offshore Orange Basin, as was hammered home by projects such as TotalEnergies’ appraisal campaign in PEL 56.
The French energy giant is making progress with its multi-well appraisal and exploration drilling campaign in Block 2913B, situated in PEL 56, aiming to make a final investment decision in 2025, with the first oil targeted for 2029. On the other hand, Galp seeks to bring in another partner on the Mopane complex, following two discoveries at the Mopane-1X and appraisal in the Mopane-2A well in 2024.
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