Namibia a potential last oil frontier, analysts say

Bloomberg says Namibia may be the last big oil frontier and could also become one of the continent’s biggest Organisation of Petroleum Exporting Countries (Opec).

Commenting on activities taking place in Namibia, Bloomberg journalist Paul Burkhardt said Namibia stood on the cusp of being a major oil producer on the continent.

“From the look of things, yes, there are some prospects in west Africa, [but] for as long as the oil companies have an appetite to do this, this could be the last big development,” Burkhardt said.

“If it is going to happen, it is going to happen in Namibia,” he added.



Favourable position

This is further aided by TotalEnergies’ estimation that Namibia could produce up to 180 000 barrels of oil per day (bpd), which could position it favourably as a major oil producer.

“Total CEO’s mentioned that six to seven of these big vessels that can pump up to 180 000 bpd, that would put Namibia on the higher end of OPEC members,” Burkhardt explained.

Other positives stemming from Namibia’s are the potential for the gross domestic product to not only possibly double but also triple.

“There have been estimates of it [Orange Basin] holding as much as 11 billion barrels – the fuzzy math is that if you multiply that by today’s oil prices, it is roughly a trillion dollars. OPEC is even courting the government; it could double or triple GDP,” Burkhardt said.



Big numbers

Should Shell’s and TotalEnergies’ discoveries be commercially viable, investment flows into Namibia could be around US$29 billion, the international consultancy firm Wood Mackenzie estimates. At the current exchange rate, it would be more than N$500 billion, about 2½ times Namibia’s nominal gross domestic product (GDP) last year.

According to Wood Mackenzie, the Shell and TotalEnergies discoveries could potentially deliver about 6.5 billion barrels of oil, resulting in some N$60 billion in royalties and taxes flowing into state coffers annually.