Namibia Surpasses South Africa in Offshore Oil Development

The Orange Basin offshore petroleum province has become the focal point for competing energy strategies between Namibia and its southern neighbour, South Africa. While both nations share this Atlantic maritime border region containing an estimated 20 billion barrels of oil equivalent, their progress diverges sharply. Namibia is rapidly emerging as a major producer, whereas South Africa remains years behind in developing essentially the same geological system despite controlling roughly two-thirds of the basin.

TotalEnergies has established itself as a key player in Namibian waters with its deepwater Venus Project. The project targets an initial production capacity of approximately 150,000 barrels per day, aiming for first oil by 2030. Reserves at the Venus-1X site are estimated to include 1.5 billion barrels of light crude and 4.8 trillion cubic feet of gas. Additionally, TotalEnergies has assumed operations from Portugal’s Galp Energia regarding the massive Mopane discovery.

Recent activity by Shell Plc further underscores Namibia’s momentum as a global deepwater hub. Last month, the company and its joint venture partners reported a major oil discovery at the Merlin-1X exploration well within Petroleum Exploration Licence 39. Located roughly 290 kilometres off the coast in Block PEL 39, this resource holds recoverable reserves estimated at 750 million barrels for Phase 1. This success marks a critical turnaround following engineering hurdles and financial impairments booked by Shell in early 2025 on older wells such as Graff-1X and Jonker-1X.

In contrast to Namibia’s rapid ascent, South Africa faces significant obstacles that have stalled commercialization of its own resources. The Ibhubesi Gas Field, located in the Orange Basin’s Block 2A, represents South Africa’s largest undeveloped offshore gas asset with an estimated volume of 540 billion cubic feet and 4.3 million barrels of condensate. Despite drilling efforts like the Gazania-1 Well off the West Coast in 2022, sufficient volumes were not found for commercial extraction.

Regulatory environments differ markedly between the two nations. Namibia operates under a stable single-window regulatory model managed by its Ministry of Mines and Energy alongside the national oil company NAMCOR. This system provides international operators with predictable timelines through a standardized Model Petroleum Agreement featuring transparent fiscal terms, including a 35 per cent petroleum income tax and a five per cent royalty. Exploration and appraisal permits are typically secured within three to nine months.

South Africa struggles under layers of permitting bottlenecks caused by overlapping regulatory authority, which can stretch approval processes to as long as five years. Legal challenges have further delayed numerous projects expected in the coming years. In March 2026, activists and fishing cooperatives petitioned the High Court to rescind permits for up to ten ultra-deep-water exploration wells off the West Coast.

Environmental litigation has also played a substantial role in hindering progress along the southwest coast. Last year, the Western Cape High Court overturned environmental authorization granted to TotalEnergies and Shell, citing critical failures in assessing oil spill impacts on small-scale fishers. A landmark ruling from October 2025 invalidated environmental authorization for a proposed Eskom gas-to-power plant in Richards Bay.

A foundational lawsuit filed by local communities in 2021 blocked a Shell seismic survey, with a precedent-setting ruling expected later this year from South Africa’s highest court. Patrick Pouyanne, CEO of TotalEnergies, lamented the situation during an earnings presentation, stating that companies cannot explore or spend money if they must face courts permanently and permitting becomes too complex.

Gwede Mantashe, Minister of Mineral and Petroleum Resources in South Africa, has pushed for specialized energy courts to address delays from environmental lawsuits. He contends that regular legal challenges reflect a resistance to national progress and is prompting the push for fast-tracked dispute mechanisms.