Shell says it is taking a cautious approach in developing its oil discoveries in Namibia due to the high-cost implication of the process.
“We will take our time and be thorough in the way we look through that because these are significant capital investments, and therefore we want to make sure that we are able to deliver returns for our shareholders,” Shell Chief Executive Officer Wael Sawan said at the company’s 2023 fourth quarter results presentation.
Sawan emphasised the oil major’s focused and strategic approach to oil exploration, highlighting the importance of identifying optimal drilling locations for lucrative opportunities.
He said Shell has already commenced drilling some exploration and appraisal wells, with plans to undertake additional drilling in the coming months.
“As I’ve said in the past, there’s no question about the volume of the resource. The biggest question is around finding the sweet spots within that resource, within the rock, to be able to create the opportunities for exciting developments there,” he said.
He said the prudent approach highlights Shell’s commitment to maximising value for its stakeholders while mitigating risks associated with capital-intensive ventures.
Moreover, Sawan acknowledged the collaborative nature of exploration efforts in Namibia, saying: “It helps that we’re not the only ones drilling there, so there are other activities in the basin which will, of course, provide more data points that inform the broader picture around the prospectivity of the basin and our ability to create value from it.”
This comes as Shell last year cautioned that the first oil from its discovery in Namibia is unlikely before 2030.
Shell has made four significant discoveries in Namibia to date–Graff, La Rona, Lesedi, and Jonker, were the well was drilled to a depth of 6,168 meters in water, which was 2,210 meters deep.
Northern Offshore’s semi-submersible rig, Deepsea Bollsta, is drilling an appraisal well on Jonker, which could be the first field to be tapped by Shell, with the Jonker-1A appraisal well having spudded in late August.
Jonker-1A is being drilled more than 22 kilometres northwest of the Jonker-1 probe, indicating the potential size of the discovery.
Jonker is estimated to hold about 2.5 billion barrels of oil in place, according to NAMCOR.
Namibia is optimistic about the future economic prospects of the country following the discovery of oil by Qatar Energy, Shell, and Total Energies in the Orange Basin, offshore Namibia.
