US$340m spent on oil exploration in 2023

International oil and gas companies (IOCs) exploring for oil in Namibia have spent at least US$340 million on exploration activities in 2023 alone, the National Petroleum Corporation of Namibia (Namcor) said.

“In terms of the investment that went in, we are talking about US$340 million over the last year or so," Namcor asset manager for upstream exploration Martin Negonga said.

He added that Namibia had experienced a considerable number of exploration wells being drilled just for 2023 alone.

“We have drilled 11 exploration wells, that has never been done in Namibia, and five appraisal wells, so that is a significant investment that has gone into the offshore market,” he said.

Negonga said despite the significant exploration expenditure, the IOCs involved were not able to derive any benefit as the wells drilled had shown no potential for holding commercial volumes of oil.

“Most of that money is sink costs. Basically, these companies that drilled, they lost that money because they could not recover and that cost was not to the government,” he said.

Reuters in June reported that Namibia has of late become an oil exploration hotspot after several discoveries in recent years along its coast.

It has not yet produced any oil or gas, but oil majors such as TotalEnergies and Shell have made discoveries estimated at 2.6 billion barrels, with production expected from about 2030.

There have been discoveries in the Orange Basin and there are other prospective areas, including Lüderitz and the Kavango and Walvis basins.

Namibia is planning for first oil production from Venus, estimated to hold about 5.1 billion barrels of oil, between 2029 and 2030.