French oil major, TotalEnergies, plans to make a final investment decision (FID) on its offshore oil discovery in Namibia by 2026, CEO Patrick Pouyanne said on Wednesday during a press briefing in Paris.
Pouyanne stated that the development would have a production capacity of 150,000 barrels per day, slightly lower than the 160,000 barrels per day discussed during its investor day in October.
He had previously indicated during an earnings call in April 2024 that an FID could be reached by the end of 2025. However, he noted that challenges in achieving breakeven at under $20 per barrel, an internal requirement for FID, have led to a revised timeline.
Moreover, TotalEnergies is also expected to make a final investment decision on its Venus discovery by year end.
The oil company’s project is part of a broader oil exploration effort in Namibia, which currently has no oil and gas production.
Meanwhile. the company has encountered difficulties due to the high gas content in its discoveries, increasing development costs.
Similarly, Shell, another major oil firm operating in Namibia, has faced financial setbacks. The company recently recorded a $400 million loss in its operations and stated that its discoveries in Petroleum Exploration License 39 (PEL39) are not yet commercially viable.
Shell’s CEO noted that the geological structure of the region, particularly lower permeability rocks, has made oil and gas extraction more complex. Despite these challenges, Shell has applied for permits to drill an additional 10 exploration and appraisal wells, signaling continued interest in Namibia’s offshore potential.
Growing interest in Namibia oil industry
Namibia has attracted significant investment from global energy companies. In December 2024, Portuguese oil firm Galp made new discoveries in PEL83, located near the blocks held by TotalEnergies and Shell.
While Shell is still evaluating the commercial viability of its project, it has partnered with QatarEnergy (45%) and Namibia’s state-owned oil company, NAMCOR (10%), to advance exploration in PEL39.
With both TotalEnergies and Shell targeting FIDs by 2026, Namibia could emerge as a crude oil-producing nation by 2030 if commercial viability is confirmed.
