Chart of the week

Since Shell's 2022 oil discovery at the Graff-1X well, the Namibian oil sector has gained significant international attention. The prospect of the new industry providing significant local content opportunities and generating substantial government revenue has provided a degree of hope to a stumbling economy. The probability of reaching first oil in a market-enabling economic and judicial state has constantly been debated. However, as more information comes to light, that probably is becoming ever more likely.

Next year is expected to be pivotal for offshore drilling in Namibia, with over a dozen wells planned by companies such as Total, Galp and BW. Since the Graff discovery, offshore wells have seen an unprecedented 87% success rate, setting high expectations for the coming year. The government has approved more than 60 appraisal/exploration wells for over half a dozen companies as international interest reaches new heights.

Total is expected to be the first to announce its final investment decision (FID) in 2025, aiming to start production at its Venus site. It aims to keep production costs at around US$20 per barrel, placing Namibia on the lower end of the global cost curve and providing protection against fluctuating oil prices.

While production estimates remain uncertain, Total aims to start producing over 150 000 barrels per day by 2029. By the mid-2030s, as wells by Shell and Galp come online, production could exceed 700 000 barrels per day. That would position Namibia among the top five oil producers in Africa and establish it as a significant player on the global scene.