Despite shared borders and an uptick in offshore interest, neighboring countries South Africa and Namibia look to be going in opposite directions in the oil and gas industry.
Namibia is emerging as a potential powerhouse within the oil and gas industry, while South Africa, which has had recent large discoveries, is focusing more on renewable energy sources. Recent discoveries in both countries (Namibia’s Venus and Graff wells and South Africa’s Brulpadda and Luiperd wells) are driving interest in a region that is not normally associated with oil and gas.
“We have already seen Chevron getting into, or trying to get into, a block adjacent to the block where the Venus discovery happened. We are also seeing a couple companies looking to acquire funds to drill sort of exploration wells in the region,” Siva Prasad, an analyst on Africa at Rystad Energy, said of the February 2022 discovery of light oil with associated gas on the Venus prospect, located in block 2913B in the Orange Basin, offshore southern Namibia.
“There was a lot of buzz when Brulpadda-Luiperd happened; Total is trying to drill three to four more wildcats in the region,” Prasad added referring to the gas condensate fields located on Block 11B/12B in the Outeniqua Basin, 175 km offshore the southern coast of South Africa.
While interest in both countries is being picked up at the same time, they are each moving in different directions. One reason South Africa looks to be going in a different direction is its desire for a clean and renewable energy source.
The worldwide demand for energy has only been increasing, driving up the oil and gas sector. And while more and more fuel is coming out of the ground, countries still desire an environmentally responsible energy source. However, there isn’t enough renewable infrastructure, forcing countries to continue to rely on oil and gas.
South Africa isn’t that compelled to expand its oil and gas industry, instead sticking to coal and the fuel reserves they currently have, while they search for a renewable energy source, according to Prasad.
“South Africa will cater to domestic demand, primarily, since you know, that dependence on coal is pretty high and they want to move on to cleaner sources of energy. And I think gas is the first step,” he said.
“With Namibia, it’s a different story because we’re looking at probably 1.7 billion barrels of oil,” he continued. “It’s a small country and we are looking at all the western nations like Nigeria and Angola going in decline. So, the future for Namibia, with respect to oil, it’ll be catering to majority international markets.”
Venus might actually be even larger than that, as some analysts believe that it extends into the adjacent block, giving it the potential to be “one of the biggest deepwater finds ever made,” according to Liam Yates, a senior research analyst at Wood Mackenzie.
This is quite impressive for a region that was dormant for a long time, Prasad noted. Although there had been sporadic exploration within the area, the amount of operators has never been close to what it is now.
“Suddenly we are seeing the operators like Eco Atlantic expand in offshore Namibia and looking to drill once it acquires a certain amount of funding,” Prasad said. “We have heard reports that Gail is going to drill a wildcat as well. Chevron has made an entry into the offshore region of the country and we know a couple of other operators who have increased their stakes, especially offshore of these two countries.”
Jennifer Pallanich contributed to this article.
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