Recent deepwater oil discoveries off the Namibian coast have ignited significant excitement within the industry, according to Wood Mackenzie's Upstream Research Director Ian Thom. In an opinion piece, Thom highlighted the breakthrough in February 2022 with major discoveries by Shell and TotalEnergies in the Graff and Venus blocks, with Venus potentially being one of the largest oil discoveries in Sub-Saharan Africa and globally.

Namibia currently holds 230,000 square kilometers of licensed acreage, a significantly larger area compared to Norway's less than 100,000 square kilometers. Thom pointed out that despite the vast potential, Namibia remains underexplored, with fewer than 20 deepwater wells, in contrast to thousands in more established offshore regions.

Wood Mackenzie anticipates further exploration success and resource upgrades in Namibia, drawing parallels with other frontier deepwater hotspots like Guyana, Suriname, and Senegal. Thom emphasized that the basin is at an early stage of exploration, requiring more wells to better understand subsurface conditions.

Project economics in Namibia appear robust, with positive net present value (NPV) even at $40 per barrel, according to Wood Mackenzie's modeling. If appraisal and well flow tests meet expectations, Thom suggested that oil production in Namibia could exceed 500,000 barrels per day within a decade, with upstream investment potentially reaching up to $4 billion per year in the first half of the next decade.

Thom acknowledged that monetizing gas in Namibia poses challenges due to factors such as ultra-deepwater location, seabed topography, offshore conditions, gas quality, and limited local market and infrastructure. Reinjection may be preferable initially to benefit from higher oil returns.

Operators are expected to adopt a multi-phase development concept, using floating production storage and offloading (FPSO) installations initially, followed by drilling over 100 subsea wells on the fields. Wood Mackenzie sees Namibia emerging as a core region for major international oil companies (IOCs), with potential projects becoming crown jewel assets for several operators.

Thom's insights are summarized from a Wood Mackenzie report on Namibia's deepwater prospects, and the analysis envisions Namibia becoming a focal point for major IOCs in the coming years.