RE: Could Namimbia be the next oil frontier?30 Aug 2023 18:49
But the early results have raised speculation in the industry that the finds could rival the series of discoveries from 2015-18 in Guyana, which turned the tiny Latin American nation into a major producer.
“This is incredibly early stages but you can see the excitement,” Thom said. “The amount of focus that Shell and TotalEnergies are putting into Namibia, it is clear that they see enormous potential here.”
When privately held UK-based exploration group Impact entered Namibia in 2014, the number of failed wells meant the country was seen as a “graveyard” for oil exploration, said chief executive Siraj Ahmed. “A place where there’s no real potential for hydrocarbons.”
But Impact’s thesis was that over thousands of years, the Orange River that runs across Namibia and South Africa had dumped resource-rich sediment further into the Atlantic Ocean than had previously been explored.
Total acquired part of Impact’s licence in 2017 and was joined by QatarEnergy two years later. QatarEnergy did not respond to a request for comment.
Although oil executives caution that it is too soon to predict whether the fields will be developed or how much revenue they might generate, the initial finds have raised Namibian hopes of a future economic windfall that could help further develop the country.
Namibia, with its small population of 2.5mn, has a GDP per capita of about $5,000, similar to Indonesia and Mongolia, but also one of the world’s most unequal societies, second only to South Africa, according to the World Bank.
Namibia’s oil ministry and representatives of Namcor were not available for comment.
International companies have mined diamonds and uranium in Namibia for decades but there is no history of oil production.
Successful development of the offshore fields would require the building of an entire new industry, as it did in Mozambique on Africa’s east cost, where Total has led a fraught attempt to develop a giant offshore gasfield since 2010. The French energy major suspended operations in 2021 after attacks by Islamist insurgents.
Given the time it may take to develop the Namibian fields — Shell has said it would not expect any oil from the country until after 2030 — there is a chance that oil demand could already be declining when the projects start to produce.
“There is a big risk of encouraging the initiation of an industry that, at least long term, is in secular decline,” said Michael Coffin, a former BP geologist who is now the head of oil, gas and mining at the think-tank Carbon Tracker. “That doesn’t seem like a great bet for the economic development of any country.”
The oil companies argue that demand will remain significant even as it declines, with potential developments such as Namibia offering opportunities to use advanced technology to produce oil with lower operational emissions.
“Whatever scenario you look at, it’s very clear that, even in 2050, oil a
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