Namibia is among the top five countries in Africa with the highest percentage of drilling rig demand, according to the State of African Energy 2024 Outlook.
The ranking includes South Africa, Equatorial Guinea, Ghana, and Mozambique and sheds light on the critical interplay between exploration initiatives and investment decisions.
The African Energy Chamber said Namibia’s prominence in the ranking underscores its role as a key player in the competitive energy sector.
“The driving force behind this elevated rig demand is closely tied to contingent resources, signalling a direct correlation between exploration ambitions and the financial commitments expected in the near future,” the report noted.
The Chamber noted that healthy levels of exploration drilling are expected over the 2023-2025 period with Algeria, Egypt, Namibia and Nigeria driving the majority of the activity with most other producing countries showing very little dependence on upcoming project sanctions to drive their rig demand.
“Mega discoveries in the deep waters of Namibia have kicked off exploration in the region and the country, along with Nigeria and Egypt, are expected to drive the deepwater exploration drilling over the period,” the report stated.
Similar to the remaining recoverable resource, the Chamber highlighted the supply and spending potential as National Oil Companies (NOCs) and majors are expected to drill close to 50% of the total exploration wells between 2023 and 2025.
M&A activity across Africa in 2023 has resulted in a total transaction value of US$3.233 billion in deals either announced or closed.
“It is to be noted that there were no farm-ins from majors except for Eni’s transaction with Neptune Energy wherein Eni acquired stakes in Neptune’s African assets via a corporate transaction where Eni agreed to acquire all of Neptune Energy’s oil and gas assets excluding German and Norwegian operations,” the report noted.
On the contrary, the Chamber said there have been exits, mainly from exploration licences, by the majors.
“Considering there is exploration interest from the majors in regions like Namibia, it can be said that exploration focus from the Big Oil can be limited to only certain regions in Africa going forward,” the African Energy Chamber noted.
This comes as Namibia has witnessed significant drilling activities with projects such as Venus-1 (TotalEnergies) and Jonker-1 (Shell Plc), both completed in 2022 and 2023 respectively, underscoring the momentum in exploration.
The spudding of Venus-1A (TotalEnergies) and Osprey (Eco Atlantic) in 2023 further reflects the continued interest and investment in Namibia’s energy sector.
