Oil majors, TotalEnergies and Shell, have invested billions in their ongoing oil exploration activities off the coast of Namibia, according to a report by Evercore ISI.
In December 2022, Shell commenced its three-well exploration campaign, with an investment of N$2.4 billion (US$124 million) for the Deepsea Bollsta, at an average daily rate of N$6 million (US$340,000).
The contract, which has a six-month option, could extend until mid-June 2024.
A second floater is expected to arrive offshore Namibia by mid-February 2023, with the Tungsten Explorer mobilising from the Eastern Mediterranean for a two-well appraisal programme at TotalEnergies’ Venus discovery.
According to the investment banking advisory firm, the 225-day contract is reported to be valued at N$1.4 billion (US$79 million), with an average daily rate of N$6.2 million (US$351,000). Unexercised options could keep the seventh-generation drillship contracted until February 2026.
In the second quarter of 2023, TotalEnergies is reported to have contracted a second rig, the Deepsea Mira from Norway, for a 300-day exploration and appraisal campaign at Venus.
The N$2.4 billion (US$135 million) contract implies an average daily rate of N$7.9 million (US$450,000) for the sixth-generation semi-submersible, which likely includes reimbursement for mobilisation and reactivation.
All three floaters are expected to be operational throughout the next summer and into the fall, with options potentially keeping Namibia’s floater count at a record three units throughout the first quarter of 2024.
According to S&P Global, there is a probable 50% probability of TotalEnergies proceeding with a development tender in mid-2024 and four possible 50% probability exploration tenders from Eco Atlantic and ExxonMobil for 2024-2025.
Exploration companies have invested over N$30 billion in the country since independence, according to the Namibia Petroleum Operators Association (NAMPOA).
The 2023 Evercore ISI E&P Spending Outlook predicts that global exploration and production spending will increase by at least 14% in 2023, decelerating from 20% growth in 2022.
