By: Nghiinomenwa Erastus and Kelvin Chiringa
A deep-water exploration well by Shell, Namcor and Qatar Energy has made a discovery of light oil in both primary and secondary targets, the partners confirmed last week Friday.
However, projection shows it will take six for the new found reserves yield benefit for Namibia.
According to Namcor, managing Director, Immanuel Mulunga, he hopes that the first well discovery will put to rest doubts about the hydrocarbon potential of Namibia and open a new dawn in the country’s future prosperity.
The group of companies confirmed the rumours that were circulating on the 25th and 26th of January 2022 as a result of unnamed sources that spoke to Reuters.
Reuters had reported that sources had confided that the drilling results had shown one layer at least 60 metres deep of hydrocarbons, holding an estimated 250 to 300 million barrels of oil and gas equivalent.
In a statement the companies detailed that their Graff-1 well has proved a working petroleum system for light oil in the Orange Basin, offshore Namibia.
The oil find is 270 km from the town of Oranjemund.
The drilling operations commenced in early December 2021 and were completed in early February 2022.
Mulunga has said that so far, they have to manage expectations while carrying out due diligence technical work that could take time for Namibia to begin to be seen as a commercial global oil producer.
“It will take us two years to do an appraisal program. Once we do that, we will sort of take another four or so years to do the development work. So, we expect production to only take place in five or six years from now,
He added they are going to do some more analysis of the drilling results to tell whether it is indeed a commercial discovery.
The oil reserves findings come, however, in the midst of the transition period where the developed nations are leading, and pressuring others to cut down on carbon-emitting products.
The three partners also indicated that in the coming months, they will perform extensive laboratory analyses to gain a better understanding of the reservoir quality and potential flow rates achievable.
Namcor manager for marketing, and communications, Paulo Coelho also explained that as they can learn a great deal from the results of Graff-1, more exploration is expected.
Coelho and Mulunga both confirm after that the partners are going to drill more wells, four of five to do what is called an appraisal program.
While adding that it is still early days but it is something that the country needs to be excited about.
Shell, and partners are not the first to declare positive results of oil/carbon-emitting reserves in Namibia- with Recon Africa announcing their findings a year ago in their much-debated operations.
For its own part, Shell is a holder of a 45% stake in the offshore Petroleum Exploration License 39 (PEL 39) while another 45% interest is held by Qatar Petroleum and only 10% is currently held by Namcor.
Despite the oil reserves findings, it will have no impact on the cost of fuel in the country as the oil still needs to be refined and Namibian has no refinery but rather a storage.
The Namcor operated storage still has no well documented impact on the cost of fuel locally, as its operation and return on investment are yet to materialize.
For November and December 2021the country has spent N$1,6 billion in refined oil import.
While the consumers have been facing the brunt of crude oil price as translated from international oil prices, which are consecutively passed on at the pump and transport the cost of imports.
Fuel prices are also expected to go up as international crude price continuously gain ground faster than before- if the increase materialise the government will cover the under-recovery or passed it on to consumers as it did for the current monthEmail: email@example.com