Namibia’s Oil Discovery Dilemma: Unraveling the Geological Puzzle

This week, Maggy Shino, Namibia’s petroleum commissioner, made a noteworthy announcement regarding Shell’s recent oil discoveries. The revelation includes 200 million barrels at Graff and 300 million barrels at Jonker, considerably lower than earlier estimations.

Estimates Take a Dip

In 2022, Upstream reported a surge in Graff’s recoverable oil resources to 400 million barrels, with a mention of a whopping 500 million barrels. While Jonker’s estimates remain elusive, recent figures suggest a downward adjustment.

Decoding Geological Factors

A 50% reduction in recoverable volumes for Graff raises questions about the geological reasons behind this shift. Insights from a conversation at a conference last year hinted at a possible explanation—a mysterious “mineral.” Though details are scant, speculations point towards illite, notorious for hindering pore space and reducing reservoir permeability.

Contrasting Narratives

Despite initial impressions of a prolific reservoir, reduced permeabilities can impact recoverable volumes. This challenges the narrative of Shell’s Namibia probe portrayed as an oil flow powerhouse in a previous article titled “Like a Train.”

Testing Economic Viability

Could Graff and Jonker signify discoveries with lower permeabilities than optimal for deep-water projects? This scenario becomes a pivotal test for the economic feasibility of these fields. Industry debates emphasize the necessity of high permeabilities for success, yet the Gulf of Mexico has proven otherwise with low permeability projects thriving due to favorable conditions.

Government’s Influence in Negotiations

As negotiations unfold between operators and the Namibian government, attention shifts to factors within government control, such as taxation and infrastructure. The focus on accelerating developments underscores the importance of finding common ground for the successful advancement of Namibia’s oil finds.

Closing Thoughts

The current situation beckons us to closely monitor developments in Namibia’s oil exploration landscape. With negotiations underway and geological challenges at play, the path to realizing the full potential of these discoveries remains uncertain. Maggy Shino’s commitment to accelerating developments keeps the spotlight on this evolving story. Let’s stay tuned for updates.

 

 

Hussein Boffu runs a consultancy helping you become more successful and profitable in your project. Reach out to him via email at hussein.boffu@tanzaniapetroleum.com or by calling, texting, or WhatsApp at +255(0)655376543.