Shell and TotalEnergies, two major energy companies based in Europe, are intensifying their efforts to explore a potentially significant oilfield off the coast of Namibia. This signals the industry’s pursuit of new fossil fuel resources despite the global transition to cleaner energy sources.
- Shell, which has already drilled four exploration wells off Namibia’s southern coast since 2021, received approval in June to drill an additional 10 wells. TotalEnergies plans to allocate $300 million, half of its global exploration budget, to oil exploration in Namibia this year.
- If commercial quantities of oil are discovered, Namibia could emerge as one of the world’s newest petrostates. However, this comes at a time when global oil demand is projected to decline due to the shift towards cleaner energy.
- Both Shell and TotalEnergies have committed to reducing their dependence on oil production and achieving net-zero emissions by 2050. Shell has already decreased its oil output by 25% in the past three years and plans to maintain current production levels until 2030.
- The companies argue that significant oil demand will persist until 2050, even as cleaner energy sources become more prevalent. They contend that new oilfields will be necessary to meet this demand, despite efforts to reduce emissions.
- The exploration activities by Shell and TotalEnergies in Namibia follow successful drilling results in the past 18 months. TotalEnergies and its partners have discovered significant oil reserves at the Venus site, which could potentially hold over 3 billion barrels of oil.
- Developing these offshore oilfields in Namibia poses technical challenges due to the remote location and water depths exceeding 2,000 meters. However, early results have generated excitement and comparisons to the oil discoveries in Guyana from 2015-2018, which transformed the country into a major producer.