Shell CEO says that Namibia's acreage was 'very challenging'. (Image source: Adobe Stock)

The much anticipated petroleum exploration license-PEL39 offshore Namibia turned out to be a disappointment for Shell, as the company announced the discovery a write down of approximately US$400mn, reported Reuters 

Speaking about the discovery, the British oil major is reported to have said that the resources from the block 'cannot currently be confirmed for commercial development'. According to Shell CEO, Wael Sawan, Namibia's acreage was 'very challenging', with lower permeability of the rock making exploration difficult. The company is said to have faced wide ranging challenges in the technical and geological fronts, topped by high natural gas presence. Experts believe that having to deal with gas presence even before oil could be produced is no mean feat and requires costly engineering solutions. High gas presence at the beginning of production means once it fizzles out, reservoir pressure sees a sharp decline, rendering oil production a dicey job. 

'Not a setback'

'While we recognise that extracting the discovered resources presents challenges, the extensive data collected shows that there remain opportunities. Together with our partners, we are continuing to explore potential commercial pathways to development, while actively looking for further exploration opportunities in Namibia', read a statement from the company.

This comes as a discord as PEL39 has been very giving since 2022, when Shell and its partners, QatarEnergy and the National Petroleum Corporation of Namibia-NAMCOR made their first discovery in the region. Several others have followed as Shell drilled nine wells in the licence over the last three years. 

Growing global interests from exploration and production companies such as QatarEnergy, Chevron and Galp, to name a few, have set off a whole oil & gas ecosystem in the region, with tech giants Halliburton and Baker Hughes opening facilities, and high stakes logistics contracts coming into effect. 

"It is not a setback. We are positive that the remaining potential of PEL39 and other exploration campaigns will translate into commercial developments," said Namibia's Ministry of Mines and Energy in a statement on Shell's decision. 

The company saw a 92% improvement in production efficiency in Q4 2024. (Image source: PetroNor)

PNGF Sud offshore Congo has generated the largest ever single lifting for PetroNor E&P ASA with an additional 881,192 barrels of oil, priced at US$72.817 per barrel 

The aggregated 2024 lifted and sold volumes are 1,795,460 bbls at an average realised price of US$77.85 per barrel. 

Increased production efficiency 

A bounce back since its last update, the company saw a 92% improvement in production efficiency in Q4 2024 following relatively low infrastructure challenges and a successful workover campaign. While workover requirements have gone down, PetroNor has plans for additional infill drilling activities to boost production.

 With mega projects such as Moho Nord and the Gas Master Plan, Congo's hydrocarbons industry continues to thrive. 

90,000 barrels per day is being targeted from Blocks 3 and 7. (Image source: Adobe Stock)

Dar Petroleum Company (DPOC) has resumed exploration activities in Blocks 3 and 7 in Upper Nile State, South Sudan, after a force majeure was lifted by the government and the Basher Pipeline Company (Bapco)

South Sudan's Minister of Petroleum, Puot Kang Chol, has revealed an initial output target for 90,000 barrels per day from the blocks. With almost 90% of the country's resources untapped, the national oil & gas company, Nile Petroleum Corporation is highly focused on drawing investments to boost the region's domestic as well as export market. 

Export activities

Export activities from South Sudan to Port Sudan on the Red Sea, which was under blockage for almost a year, will also resume following the announcement. 

In May last year, Wildcat Petroleum signed a memorandum of understanding with the Ministry of Petroleum to advance the development and commercial exploitation of the hydrocarbon assets in selected fields. 

Red Sky is also eyeing production from the Cegonha oil discovery. (Image source: Adobe Stock)

Australia-based production and exploration company Red Sky Energy turns to Angola to advance expansion and diversify asset portfolio as it closes a risk service contract (RSC) with the Angolan National Agency for Oil, Gas and Biofuels (ANPG) to acquire interests in offshore Block 6/24 alongside ACREP Exploracao Petrolífera SA and Sonangol Exploracao e Producao SA 

Sonangol E&P is the operator of the Block 6/24 with a 50% participating interest. Red Sky Energy will hold a 35% participating interest, and ACREP will hold the remaining 15% participating interest. Block 6/24 is located 12 kilometres offshore Angola in the Kwanza Basin, in water depths ranging from 70 to 80 metres. The Block is covered by 1,531 sq km of 2D seismic and 1,465 sq km of 3D seismic.

"Over the past few years, Red Sky has been evaluating opportunities to acquire producing or near-production assets. The company is actively pursuing prospects created by major energy companies' global shift away from fossil fuels. The signing of the RSC Block 6/24 marks our first entry into Angola and is a transformational milestone for Red Sky. Block 6/24 contains a potential commercial oil discovery that the JV partners plan to evaluate for early production and cash flow generation. The Block also has substantial resource potential based on the existing 2D and 3D seismic data. The JV partners plan to prove up these resources, further improving the economics of the Block. Several parties have expressed interest in providing 100% project finance for the development. This transaction enhances our asset base with a high prospectivity offshore block and provides substantial diversification benefits, complementing our Innamincka gas and Killanoola oil projects in South Australia. This strategic move positions Red Sky for sustained growth and stability by balancing our investment portfolio across different geographical regions and resource types,” said Red Sky managing director, Andrew Knox. 

Angola's exploration and production industry continues to see global interests with Sequa Petroleum being one of the latests to acquire stakes in the region last October. 

Cegonha discovery

Red Sky is also eyeing production from the Cegonha oil discovery within the block, which can bring in substantial promise for the company. 

Once the RSC gets approval from the Angolan Parliament, a Joint Venture Operating Agreement (JVOA) will become applicable to designate roles, responsibilities and operational framework. The first three years will be devoted to seismic reprocessing and detailed subsurface evalutaion. The contract also includes scope for an optional well decision which will come into effect on the fourth year based on the studies conducted. 

The RSC is valid for a six-year exploration and appraisal period which extends to another 30 years only if comercial discovery is feasible. 

ANGP is inviting tenders for as many as 10 offshore blocks this year.