The Namibian Ministry of Mines and Energy has announced that Shell will write down $400 million related to its oil discovery in Petroleum Exploration License (PEL) 39.
The decision follows Shell’s accounting principles and reflects challenges in the commercial viability of the discoveries due to technical and geological factors.
Despite the write-down, Shell, in collaboration with its partners Qatar Energy and Namcor, remains committed to exploring commercial options and further opportunities within PEL 39.
Since the Graff-1X discovery in 2022, Shell has drilled eight additional wells in the license area, encountering hydrocarbons in many of them.
PEL 39 covers more than 12,000 km² of deep offshore acreage, located 250 km from Namibia’s coastline. While initial assessments revealed subsurface complexities and reservoir quality challenges, ongoing exploration and advanced geophysical studies aim to address these issues and unlock the area’s potential.
Namibia’s government remains optimistic about PEL 39’s prospects and is determined to attract investments and partners to develop the country’s offshore resources. Officials emphasized that Shell’s write-down will not derail Namibia’s oil and gas aspirations.
Other ongoing offshore activities highlight Namibia’s growing status as an exploration hotspot:
- TotalEnergies is advancing its appraisal and exploration in Block 2913B under PEL 56, with a final investment decision expected in 2025 and first oil projected by 2029.
- Galp is seeking a new partner for its Mopane complex in PEL 83, which has shown significant hydrocarbon volumes following two discoveries and the Mopane-2A appraisal well in 2024.
- Rhino Resources, with Azule Energy, NAMCOR, and Korres Investments, is drilling two high-impact wells in PEL 85.
- Chevron is drilling the Kapana 1X well in PEL 90 and targeting play-opening discoveries in the Walvis Basin with an 80% interest in PEL 82.
- Woodside Energy is advancing opportunities in the Orange Basin after securing 3D seismic data rights for PEL 87 in 2024.
Minister of Mines and Energy Tom Alweendo underscored that Shell’s write-down does not undermine international confidence in Namibia’s offshore resources. The continued investments by major oil companies demonstrate strong industry commitment.
While challenges persist, the government remains focused on achieving first oil production and realizing the full potential of Namibia’s hydrocarbon resources.
These exploration activities are expected to solidify Namibia’s position as a key player in the global energy landscape.
