Namibia as the Next Oil Production Powerhouse

Renowned for being one of the most recent exploration hotspots globally, Namibia is contemplating offering additional incentives and financing alternatives to international majors preparing plans for offshore oil production in the country. A number of oil and gas supermajors, including Shell, TotalEnergies, and Portugal’s Galp, have already made substantial discoveries off the coast of Namibia. However, the lack of existing infrastructure means higher costs for production development plans.

Namibia, aspiring to replicate Guyana’s success, is keen to support the supermajors with more incentives to encourage final investment decisions on specific oil production projects. Kornelia Shilunga, the special advisor and head of the upstream petroleum unit in the Namibian Presidency, stated that the government recognises the complexities and high costs associated with TotalEnergies’ development of the Venus oil field.

As a result, Namibia is exploring financing mechanisms, including credit support instruments and partnerships with international lending institutions. The country is also considering hosting oil and gas licensing rounds to attract majors and stimulate activity. Last month, a senior official mentioned that Namibia expects TotalEnergies and Norway’s BW Energy to make final investment decisions on oil projects towards the end of 2026.

International majors have been drawn to explore offshore Namibia in recent years, hoping it would emerge as the next Guyana and a significant oil producer and exporter. However, there has been a recent setback with Shell writing off $400 million over an oil discovery in offshore block PEL39 in Namibia that is currently not viable for commercial development.

TotalEnergies and Namibian authorities have initiated discussions about a possible development of the Venus discovery, with TotalEnergies’ CEO Patrick Pouyanné stating that the supermajor could proceed with the project if it meets the company’s set rate of returns.