Staff Reporter<\/p>\n\n\n\n
DESPITE Shell\u2019s downgrade of its Namibian deepwater oil discoveries, there is still a possibility that Namibia will become a deepwater oil producer in the coming years.<\/p>\n\n\n\n
This is according to the global energy analytics firm Wood Mackenzie, which specialises in data concerning the renewables, energy, and natural resources sectors. According to the firm, Shell\u2019s recent downgrade of its Namibian deepwater oil discoveries \u2013 resulting in Shell having to write off $400 million from exploration activities \u2013 may be a setback, but it does not necessarily signal the end of subsurface exploration in the Orange Basin for either the oil major or Namibia.<\/p>\n\n\n\n
\u201cShell operates two offshore blocks in Namibia’s Orange Basin under the PEL39 licence. It holds a 45% stake in the venture, as does QatarEnergy. Namcor, Namibia\u2019s national oil company, owns the remaining 10%. Shell has drilled nine wells on the licence \u2012 six exploration wells and three appraisal wells \u2012 targeting three different plays: an Upper Cretaceous deepwater turbidite clastic play in the Graff complex, a Lower Cretaceous deepwater turbidite clastic play in Jonker and Enigma, and a Lower Cretaceous carbonate play in Cullinan-1X,\u201d the firm explained.<\/p>\n\n\n\n
Wood Mackenzie described Shell\u2019s exploration campaign as intense, but broad, covering all possible plays in its acreage. However, the firm pointed out that challenging subsurface conditions have hindered commercial success.<\/p>\n\n\n\n
\u201cExploration is fraught with risk \u2013 technical success rates average below 40% globally. For frontier basins, the risks are greater, with lower technical and commercial success rates relative to established and mature basins. Namibia stands out with a high technical success rate, but commercial success is now looking like a real challenge. While the Cretaceous deepwater turbidite clastic play is effective in the Orange Basin, well-level risks, such as reservoir complexity and distribution, have to be taken into account,\u201d Wood Mackenzie added.<\/p>\n\n\n\n
The firm highlighted that Shell had drilled three successful exploration wells in the Graff complex \u2013 Graff-1X, La Rona, and Lesedi \u2013 targeting Santonian and Coniacian reservoirs in a complex channel system. Additionally, a sidetrack (Graff-1A) was drilled on Graff-1X in 2023, a frac was completed in the Coniacian interval, and the well was flow-tested.<\/p>\n\n\n\n
\u201cIn March 2023, Jonker-1X targeted the same Albian stratigraphic level as the Venus discovery and found light oil. This was followed by two appraisal wells and a flow test on Jonker-2A. In March 2024, the Enigma well confirmed the presence of hydrocarbons in what we assume to be a reservoir at the same stratigraphic level as the nearby Jonker field,\u201d Wood Mackenzie explained.<\/p>\n\n\n\n
The firm added that the Cullinan-1X was the only exploration well that resulted in a dry hole. They revealed that it focused on the carbonate build-up at the top of the outer high created by seaward-dipping reflectors, thought to be charged by the marine Aptian source rock.<\/p>\n\n\n\n
\u201cWe think Shell will probably hold on to its Orange Basin acreage, awaiting results from other wells. In Namibia, it may let the blocks lapse, but in South Africa, it is likely to retain and possibly extend its blocks, gathering more data from ongoing and planned wells to better understand the basin\u2019s geology. The recent setback will not necessarily derail the exploration campaign or damage the perceived perspectivity of other Orange Basin blocks. Different parts of the basin have different geology. Namibia will still become a deepwater oil producer in the coming years, in our view; it just won\u2019t be from Shell\u2019s licence area. TotalEnergies and Galp have had more luck, discovering larger volumes and better-performing wells. Commerciality is looking much more likely,\u201d Wood Mackenzie analysts argued.<\/p>\n\n\n\n
Picture for illustrative purposes only.<\/p>\n","protected":false},"excerpt":{"rendered":"
Staff Reporter DESPITE Shell\u2019s downgrade of its Namibian deepwater oil discoveries, there is still a possibility that Namibia will become a deepwater oil producer in the coming years. This is according to the global energy analytics firm Wood Mackenzie, which specialises in data concerning the renewables, energy, and natural resources sectors. According to the firm, …<\/p>\n","protected":false},"author":10,"featured_media":370004,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,24],"tags":[],"class_list":["post-370002","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","category-news"],"yoast_head":"\n