Industry reports are emerging that the oil discoveries made offshore Namibia by Shell and TotalEnergies at the beginning of the year could hold much more oil and gas than originally expected. An online industry website, Upstream, has reported the Shell discovery, which was initially thought to hold 400 million barrels, could now hold as much as two billion barrels of oil, while the TotalEnergies well could hold as much as three billion barrels.
The website further reported that Shell is now considering adding a floating Liquefied Natural Gas vessel alongside a crude FPSO vessel because the discovery could hold up to six trillion cubic feet (tcf) of natural gas. An FPSO refers to a floating vessel located near an offshore oil field, where oil is processed and stored until it can be transferred to a tanker for transporting and additional refining.
Commenting on the breaking industry news, Olayinka Arowolo, the chief executive officer of local oil exploration company, Nabirm, welcomed the development, as the country continues to unlock the multi-billion barrel potential of its acreages.
"I am very pleased that back-to-back discoveries have been made in Namibia successfully, opening up interesting plays in the Orange Basin. The Graff-1 discovery and this subsequent appraisal from 400 million barrels to 2.0b barrels when confirmed is truly an incredible reality; even if aligned with the industry rule of thumb that oil reserves in the ground are worth one-third of the current market value. In my opinion, surrounding prospects could represent areas of significant potential and I am looking forward to more discoveries across multiple basins on and offshore," Arowolo told New Era.
The commercial viability of these oil discoveries has the potential to benefit Namibia's economy by billions of dollars in revenue. Also, a bourgeoning local oil industry holds the potential to create a unique business opportunity for the country's economic development, through the establishment of a new sector that could provide much-needed jobs.
During a recent interview, National Petroleum Corporation of Namibia (Namcor) spokesperson Utaara Hoveka said the recent oil discoveries could attract local and foreign investments in exploration and development from international oil companies who might be interested in pursuing business opportunities in Namibia.
"These could lead to more discoveries being made and increase the volume of proven oil reserves. The oil discoveries could have a spin-off effect in the economy and activities of the oil industry could boost the GDP growth of Namibia," said Hoveka.
He added the revenue generated from oil production could fundamentally transform the domestic economy and enable it to meet its key sustainable development goals.
Meanwhile, AFP recently reported that globally, Shell swung back into massive profit last year as oil and gas prices rocketed on recovering demand and geopolitical unrest. Shell said in a statement that net profit stood at US$20.1 billion after a loss after tax of US$21.7 billion in 2020, as economies reopened from pandemic lockdowns.
"Following the pandemic squalls which decimated the oil price and indeed profits, Shell has returned to form as it finds itself awash with cash," said Richard Hunter, head of markets at Interactive Investor.
Shell revenue jumped 45% to US$261.5 billion last year, the group said. Soaring prices are also hugely boosting the incomes of oil-producing nations.