Online Reporter
Shell is still looking for further opportunities in Namibia despite writing off US$400 million from exploration activities offshore of the southern African country.
The company said although it had discovered hydrocarbons in the PEL0039 block, the discoveries “remain challenging due to resource mobility and permeability, and a high gas- to-oil ratio” that makes “extracting oil and gas harder” at the moment.
Moreover, “current market conditions, have not yet enabled clear commercial pathways that meet Shell’s investment criteria” and requirements.
Nonetheless, Shell and its partners in Namibia were now exploring other opportunities and pathways towards development of oil and gas offshore of Namibia.
“Together with our partners, we are continuing to explore potential commercial pathways to development, while actively looking for further exploration opportunities in Namibia,” a spokesperson for the company said.
“While we recognise that extracting the discovered resources presents challenges, the extensive data collected shows that there remain opportunities,” explained the company.
It further stated that it was mandated to classify the discovered resources as “commercial — non-viable” and take a write-off of the capitalised well spend for accounting purposes.
Shell’s PEL0039 license is a joint venture in which it holds a 45 percent stake as operator and also involves QatarEnergy with a participating interest of 45 percent and the National Oil Company of Namibia holding 10 percent. Shell and its partners’ exploration activities were carried out in water depths of 2500 meters and more than 250 kilometres from shore.
According to the World Bank, oil exploration, the development of green hydrogen, and renewable energy offer opportunities for economic growth and job creation for Namibia. — IOL.
