The world’s hottest postcode for oil exploration is Namibia, attracting a who’s who of the petroleum industry. So far, the African nation has generated lots of promise, but little in barrels or dollars. That’s beginning to change: The contours of its prize are now taking shape.
To understand the excitement, let’s start on the other side of the Atlantic. Back in 2015, the country attracting everyone’s attention was Guyana. Within a few short years, the Latin American nation delivered a gusher for Exxon Mobil Corp. and its partners: Oil production climbed from almost zero in 2019 to 700,000 barrels a day this year. By 2027, Guyana is expected to surpass 1 million barrels a day, putting it on a par with OPEC+ member countries such as Libya.
With memories of the Guyanese riches fresh, Big Oil headed across the ocean and grabbed exploratory acreage off the Namibian coast, hoping for a similar jackpot. All the big players got involved: Chevron Corp., Shell Plc, TotalEnergies SE, plus many more medium-sized companies and fortune-seeking wildcatters.
But Namibia isn’t Guyana, not even close. Its geology is poorer, with the rock offering what’s known as low permeability — oil doesn’t flow easily. Moreover, the gas-to-oil ratio was very high, forcing companies to re-inject huge amounts of natural gas back into the reservoirs, a complex and expensive option when operating offshore in ultradeep waters. Over the past year, the setbacks piled up: Total declared “game over” on an exploration push, Chevron announced that a high-profile well was a dry hole and Shell took a $400 million write-down, saying it couldn’t commercialize an oil discovery.
In Windhoek, the country’s capital, the mood soured. “I think the hype was too high, right, so, we need to lower our expectations,” central bank Governor Johannes !Gawaxab said in February, neatly capturing the shifting outlook.
The pendulum has swung too far, however. While the initial optimism was excessive, so is today’s pessimism. While there’s less oil in Namibia than the country’s cheerleaders had hoped, it’s easy to see the African nation pumping something like 300,000-400,000 barrels by the middle of the 2030s. Measured against the Guyanese benchmark, the riches are smaller. But in a world where new oil-production basins are few and far between, it’s still an important development. The next 12 months will provide investors with the first clear proof of the scale of the country’s crude reserves.
Crucially, two companies are close to revealing whether their discoveries are commercially viable, with one of them expected to announce whether it’s greenlighting a project — known as the final investment decision, which is very rarely reversed — in the coming year.
Galp Energia SGPS SA, the Portuguese oil-and-gas group, earlier this month announced that it’s received several bids for a stake in its Mopane discovery, and had started bilateral talks with potential buyers with the aim of announcing a sale later this year. Galp remains tight-lipped about the project, in which it controls an 80% stake, but from the data released, it could involve two vessels called floating production storage and offloading units, or FPSOs — each pumping about 120,000 barrels a day.
“We are now in presence of several non-binding offers,” Maria Joao Carioca, the co-head of Galp, told investors. “Fundamentally, we're very happy that we have credible players engaging with us,” she added. The likely sale of around half of Galp’s stake, plus the transfer of the oilfield’s operatorship to the buyer, is important because it will put a dollar figure into the discovery and speed up the path toward commerciality.
Meantime, Total has said it hopes to announce its final investment decision on its Venus oilfield in early 2026 at the latest. The project will involve a single FPSO pumping about 150,000 barrels a day. The French company reckons it can make the project work at a cost of $20-per-barrel despite very challenging geography, including drilling offshore in waters 3,000 meters (9,800 feet) deep. Total says it’s discussing more favorable terms with the Namibian government after lowering the maximum production capacity of the project but also extending the expected life of the oilfield’s output.
Total Chief Executive Officer Patrick Pouyanne told investors last week the Namibian government hoped to see the first oil from the project before the end of 2029. "So that means that we should take decisions this year before end of 2025, if we want to meet the target," he said. Industry chatter is also speculating that Total may be interested in the Galp sale.
If both Galp and Total make progress in the next six months, oil investors will be reassured about the prospects of Namibia. By mid-2026, the industry should have a clearer view of what’s at stake, incentivizing other companies to maintain their drilling campaigns despite unfavorable results so far. Guyana offers a lesson here: Many quit too early. Shell, for example, sold its stake in Exxon’s drilling campaign in the Latin American country only months before oil was discovered. Perseverance typically pays off — regardless of the size of the prize.
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