The Ministry of Mines and Energy of Namibia has announced that Shell, a multinational oil and gas company, will write down $400 million related to its oil discovery in Petroleum Exploration License (PEL) 39, following its accounting principles.
Shell deemed the discoveries commercially unviable due to technical and geological challenges. However, along with partners Qatar Energy and Namcor, Shell remains focused on exploring potential commercial options and identifying further exploration opportunities in PEL 39.
Since the Graff-1X well discovery in 2022, Shell has drilled eight additional wells in PEL 39, many of which have encountered hydrocarbons. This license covers over 12,000 km² in deep offshore acreage, located 250 km from the Namibian coast.
Initial assessments highlighted subsurface complexities and reservoir quality challenges, but further exploration and technical analysis are expected to address these issues and improve prospects.
Continued advancements in technology and detailed geological and geophysical studies aim to enhance understanding and unlock the full potential of the resources discovered in PEL 39. Together, the findings from the nine wells represent significant hydrocarbon accumulations.
The Namibian government remains dedicated to advancing these discoveries and is confident in their commercial viability. The government is determined to attract the right partners and investments to ensure successful development.
The Ministry of Mines and Energy clarified that Shell’s write-down will not hinder Namibia’s oil and gas ambitions. Officials expressed optimism about PEL 39’s remaining potential and other ongoing exploration campaigns offshore.
TotalEnergies, for instance, is advancing its multi-well appraisal and exploration in Block 2913B under PEL 56. The company aims to make a final investment decision in 2025, with plans for first oil by 2029.
Galp is actively seeking a new partner for its Mopane complex after making two discoveries and successfully appraising the Mopane-2A well in 2024. PEL 83, home to the Mopane complex, is estimated to hold significant hydrocarbon volumes.
Rhino Resources, in collaboration with Azule Energy, NAMCOR, and Korres Investments, is drilling two high-impact wells in PEL 85. Meanwhile, Petrobras is exploring farm-in opportunities offshore.
Chevron, alongside partners Namcor and Trago, is currently drilling the Kapana 1X well in PEL 90. After acquiring an 80% interest in PEL 82, Chevron is targeting play-opening discoveries in the Walvis Basin.
PEL 82 boasts over 3,500 km² of 2D and 9,500 km² of 3D seismic data. In 2024, Woodside Energy secured rights to PEL 87’s 3D seismic data, further investigating opportunities in the Orange Basin.
Minister of Mines and Energy Tom Alweendo emphasized that these investments demonstrate international oil companies’ strong commitment to Namibia’s offshore resources. While Shell’s write-down is unfortunate, the government remains optimistic about the untapped potential of offshore exploration. Efforts to achieve first oil production remain on track.
