Shell discovers light oil offshore Namibia, in first for southern African country

Energy major Shell has confirmed a light oil discovery at the Graff-1 well offshore Namibia, marking the first oil find for the southern African country, a company spokesperson said Feb. 4.

Energy major Shell has confirmed a light oil discovery at the Graff-1 well offshore Namibia, marking the first oil discovery for the southern African country, a company spokesperson said Feb. 4.

"Results from our exploration well are encouraging, establishing the presence of a working petroleum system with light oil," the Shell spokesperson told S&P Global Platts. "We'll continue evaluating the data and conduct further exploration activity to determine the extent of the system and how much of the hydrocarbons can be recovered."

This was also confirmed by QatarEnergy, which is one of Shell's partners in the PEL-39 license, located in the Orange Basin, offshore Namibia.

QatarEnergy said it had concluded drilling operations of the Graff-1 well, establishing the presence of a working petroleum system with light oil.

"We are encouraged by the Graff-1 well results, which enhance the potential of our exploration acreage in Namibia's offshore," said Saad al Kaabi, Qatar's energy minister and the president and CEO of QatarEnergy.

The Graff-1 well was drilled to a total depth of 5,376 meters in water depths of approximately 2,000 meters.

Shell operates the block with a 45% stake while QatarEnergy and National Petroleum Corporation of Namibia (Namcor) hold a 45% and 10% interest respectively.

Long wait

Namibia stood as one of Africa's exploration hot spots, motivated by the belief that subsalt prospects off the country's coastal shelf mirror geologically Brazil's giant subsalt fields.

But the southern African nation has suffered many setbacks in its decades-old hunt for oil and gas.

TotalEnergies is currently drilling at the Venus high-impact well in Block 2913B, in the Orange Basin offshore Namibia near the dividing line with South Africa.

Despite a string of unsuccessful drilling campaigns off Namibia since the 1990s, interest in oil exploration has remained strong for the most part.

ExxonMobil, QatarEnergy, TotalEnergies, Tullow, India's ONGC Videsh, and independents Lekoil, AziNam, BW Energy and Impact Oil and Gas are currently present in the country.

Oil and gas exploration in Africa slowed because of the coronavirus pandemic, though drilling activity has increased in the past 12 months.

A challenging quest

A former German colony in the southwest corner of Southern Africa that only gained independence from South Africa in 1990, the vast but sparsely populated country is well known for its diamonds, uranium, copper, zinc and gold. Since the 1974 discovery of the giant Kudu gas field, oil has eluded the country.

The Kudu gas field contains an estimated 1.3 Tcf of gas.

Namibia has been attempting to monetize reserves from the offshore field from years, but concerns over the project's viability along with wrangling between oil companies and the government on export agreements have repeatedly delayed the development.