Namibia has been frequently mentioned when talking about the future global oil landscape. With potentially significant reserves, the southwestern African country eyed the status of fifth-largest oil producer on the continent.
Namibia’s offshore oil sector faces a new challenge after significant gas discoveries alongside oil in the Orange Basin. Shell’s Graff field holds an estimated 1.7 billion barrels of oil, while TotalEnergies’ Venus could have up to 3 billion barrels. Galp also struck oil this year, though the size of its discovery is undisclosed.
The high gas-to-oil ratio in these fields complicates extraction, as Namibia’s ban on flaring requires the gas to be reinjected or processed. This adds infrastructure costs and delays, pushing back the timeline for commercial oil production. ‘Big Oil’ is concerned about the added expenses.
While global oil demand growth slows, the demand for natural gas remains strong, with Namibia holding an estimated 8.7 trillion cubic feet of reserves. The Namibian government is collaborating with oil majors to build gas extraction infrastructure, but companies are cautious about high production costs.
TotalEnergies is working to lower production costs at Venus, possibly by renegotiating terms with the government due to the gas reinjection requirements. Despite the challenges, Namibia’s oil and gas sector holds long-term promise.
