Shell Downscales Namibia Oil Exploration Priority in New Global Strategy Shift
Shell has signaled a strategic shift away from prioritizing Namibia in its oil and gas exploration plans, as the company adopts a more selective and focused global investment approach, CEO Wael Sawan announced.
While Shell maintains an active presence in Namibia’s offshore sector, the country is no longer considered a top exploration priority, Sawan said, citing a broader reevaluation of the company’s exploration portfolio.
“Of course, we have Namibia. There, we are watching what others are doing, continuing to learn, and positioning ourselves in case something interesting comes up,” Sawan explained.
Shell is now focusing exploration capital in areas where it already has proven assets and operational success—namely the Gulf of Mexico, Malaysia, and Oman.
The shift follows what Sawan described as a “significant reset” of Shell’s exploration department, prompted by mixed results from recent exploration campaigns.
“We’ve made some good progress in certain areas, but overall, the returns have not met our expectations,” he noted.
Shell operates Petroleum Exploration Licence (PEL) 39, a 12,000 square-kilometre block off Namibia’s southern coast.
Since its Graff-1X discovery in 2022, Shell has drilled nine wells in the area, including Graff, Jonker, and La Rona.
While several wells encountered hydrocarbons, the company has yet to confirm commercial viability due to technical and geological challenges.
The company has already written down approximately US$400 million related to one of the discoveries in the block.
Shell holds a 45% stake in PEL 39, with QatarEnergy also owning 45% and Namibia’s national oil company, Namcor, holding the remaining 10%.
Despite the strategic downshift, Shell remains engaged in Namibia. CEO Sawan expressed cautious optimism about upcoming activity:
“We have some exciting wells coming in the next six to twelve months. I’m looking forward to seeing the outcomes, always recognising that exploration is a long game.”
Last month, a Shell delegation led by Eugene Okpere, Executive Vice President for Exploration Strategy, Portfolio, Integrated Gas, and Upstream, met with President Netumbo Nandi-Ndaitwah to discuss Shell’s current operations and long-term outlook in Namibia.
While exploration spending may be scaled back, Shell’s engagement suggests it continues to monitor Namibia’s emerging energy potential—positioning itself to respond quickly should the commercial landscape shift.
