Namibia anticipated to produce oil affordably

Namibia could produce oil at US$20 a barrel once TotalEnergies, responsible for the Venus well, goes into production.

This augurs favourably for Namibia, given higher production costs in other jurisdictions, Cirrus Capital economist Oliver Diggle said of Namibia’s attempts to enter the oil and gas sector.

This follows the discovery of oil wells by TotalEnergies, who are anticipated to announce a final investment decision (FID) by 2025.

“Total is expected to be the first to announce their FID in 2025, aiming to start production at their Venus site. They aim 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,” Diggle said.

Diggle added that 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 in generating substantial government revenue has provided a degree of hope to a stumbling economy," he added.

High expectations

Next year holds significant prospects for Namibia as more oil and gas companies begin drilling as part of their exploratory initiatives, Diggle said.

“2025 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,” Diggle said.

Total aims to start producing over 150 000 barrels per day by 2029. By the mid-2030s, as wells from 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, Diggle said.