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It could be Africa's next big oil rush. Discoveries off the shores of Namibia could propel it to be one of the world's major producers.
If you multiply that by today's oil price, it's roughly a trillion dollars. There's another discovery that was made that could be ten billion barrels.
Global energy titans are desperate to capitalize on the discoveries, with French multinational Total Energies hoping to start development on the Venus oil field as early as this year, and they aren't the only ones excited.
We've read it one well in Namibia so well, you know, in our industry, we know that we need to appraise and to continue.
It seems that the discovery might be giant.
Well, certainly a basin that has seen some early exploration success by others. We've got one large block off Namibia that we expect to put on an exploration down in late this year or early next year.
To give you a sense of our belief in Namibia, roughly a quarter of our deep water expiration spend in twenty twenty three and twenty twenty four will be directed to Namibia. So it is a theater that we fundamentally believe in.
But as the world starts to wean itself off of oil, is there actually time for Namibians to benefit from the discovery? And could the rush fade away just as quickly as it arrived.
I'm Jennifer's Abasaja.
And this is the Next Africa Podcast, bringing you one story each week from the continent driving the future of global growth, but the context only Bloomberg can provide. Bloomberg's Paul Burkhardt has been watching the developments closely. His story is out now and he's joining us to talk through it. Hey, Paul, thanks so much for joining us. So let's just dig through this story because you've been taking a look at this in particular in Namibia. Yeah, and really what the
implications are for the country. How big of a deal could this be for the country if there were to be a massive discovery. As you sort of allude to in your story.
There's been a search for oil offshore in the MAYBEA for a long time. I was there, I think about ten years ago when I first moved to the continent, and there were a number of explorers that were out there, but Finally, in twenty twenty two, Shell and Hotel both made discoveries there and they've seen rough estimates holding as much as eleven billion barrels. So the fuzzy math is if you multiply that by today's oil price, it's roughly
a trillion dollars. There's another discovery that was made that could be ten billion barrels. So again you kind of have to note that none of this has been deemed commercial yet. The oil might be there, but you have to figure out how to get it out. To put it into context, Nigeria, that's been Africa's biggest producer, has proven reserves of about thirty seven billion barrels. Just to get to the numbers that we're talking about right now
really gives you a sense of scale. Opek is even courting the government and could double triple GDP, so it's enormous.
It could really change things there.
And so we've heard Totel discuss the fact that they plan to start work on this as early as the end of twenty twenty four. How quickly are are they moving on this, because I imagine there's quite a process to actually get things going and actually see the benefits of this.
Yeah, there's Shell also has things planned.
Totel seems to be a little ahead in the schedule, and overall there's really like kind of a gold rush that's going on. The Portuguese explorer GALP they made the other discovery, Chevron's bought into some of the blocks, and the other big oil companies that don't have a football yet they're going to be looking to buy into these areas offshore. So we've reported sources saying Exxon has interest
in the Gallop discovery. Just about every big oil company is looking in the Orange Basin where they've struck oil.
Things are moving quite quickly.
How is it actually working on the ground, Paul, from your understanding, especially when you think about all the players that are now rushing in.
Well, you know, the oil companies are racing against the energy transition really, which would.
Bring on lower demand for oil.
So as you're using cleaner sources of energy, you're using less oil that will start to dent this like one hundred million barrels a day that's consumed now, that'll start to go down. The value of crude will start to go down. These the oil companies aren't denial about that, but they want to develop these big discoveries, like really quickly before that really drops off. The pace we're seeing
is unprecedented a lot of ways. So when I was in Wallas Bay last which is just on the coast, I could see oil equipment on the pier, people workers with coveralls that are marked with like schlumber Jay, one of the oil service companies. See those in town, and so it's happening. You hear officials talking about people wanting, companies wanting land, and there's really activity brewing. It's really poised to start.
And you mentioned officials there, Paul, I mean you've been speaking to officials on the ground there. What are they saying. Is anyone optimistic potentially about this?
I think yeah, they're optimistic, but they're also kind of cautious. Again, the oil industry being really specialized.
I think the governor of.
The area where the main harbor is said, we need to build skills and we just we need to train people up to be able to participate in this. The mayor, Trevino Forbes of Walvis Bay has talked about companies requesting land, things that I've never encountered much of in the past.
When as a local authority We have received a lot of interest for people trying to acquire an end for storage facilities, and there is something that you're also looking at. But it's very difficult, you know, when you we can't continue operating in the way we operate in.
I think there's still some skepticism about it, what will happen because there was a gas discovery that was made in the seventies some people in Namibia. I've spoken to Namibians on my trips there who mentioned this and they said, oh, nothing happened, So there's always going to be people will believe it when they can see it. Another thing that very close by that people have watched happen is Angola is a neighbor of Namibia.
Everyone there has watched.
How you know, the oil did kind of very little to boost livelihoods of most people on the ground, and already even the state oil company, Namcore has had some.
Weirdness and arrests.
There was a suspended official there because potential corruption and trying to clean that out. But there's still just the warning signs and there's some apprehension about it too.
Of course, Paul, you're sticking with us and when we come back, we're going to ask whether this is actually a long term investment for Namibia, as you mentioned, potentially a risky one, especially if we think about where the world is right now starting to turn away from oil.
We'll be right back, all right, welcome back.
Paul is still with us here and we're talking through Namibia's oil rush. But if you think about where the world is at this time, some might wonder whether or not this is the opportune time to actually go all in on oil. We've seen governments across the world looking to reduce demand for oil as they try to tackle climate change or have.
Some impact in it.
So, Paul, you were mentioning this long term plan investment for the country, is is it risky considering where we're at right now in twenty twenty four.
Of course, anything any major projects is subject to delays. Namibia's government is regarded as relatively stable, so comparatively on the continent there might not be as much risk versus other places with a lot of natural resources. But what we see even Senegal now we're seeing oil output there, but that project and another big one for liquefied natural gas,
has had timelines extended more than once. So this is just the nature of a lot of these countries where there isn't a lot of infrastructure.
As you see these projects fall.
Behind or they're more and more delays, then there's going to be more of a problem with sort of meeting like a real healthy market for oil. So yes, there's an increasing risk for that. One of the things that we hear from a lot more often from African nations is this is the twist because they want to produce their own natural resources. Africa as a continent, it's only missions footprint is relatively small in comparison to the US
or Europe or China. So they're saying, it's our time to produce this oil and gas and don't tell us what to do. So there's a real there's a willingness, and I think that's why Namibia also has like relatively good terms for oil companies to operate in and so that makes them even more attractive other than the resource itself.
Yeah, that comes up a lot, Paul.
I've noticed during COPP during the Climate Change conference. That happens every year, especially when you hear African leaders saying, you know, you need to consider the place at which the continent is at.
When we think about the transition.
I mean when we hear from other campaigners or environmentalists, are they receptive? I mean, are they understand that there is still development and you know, energy that is needed on the continent or do they push back?
Would you say yeah, I.
Think you get a range of answers.
It's difficult argument to make for especially for environmental groups that want to end the use of fossil fuels, and certainly they don't want to see that developed off their coastline. In Namibia itself, it has a relatively small NGO sector, just because the population is just I think two point seven million or something like that proportionately that there aren't as many groups that would be potentially be resisting this.
There has been resistance to an onshore oil campaign that came earlier because it's in a very ecologically sensitive area. We haven't seen an orchestrated campaign on the offshore projects in the way that we have seen the same in South Africa.
But you know, don't know that could change.
And is it safe to call this the last big oil rush poll?
Is that too dramatic of a term?
I mean, I wonder sort of how you place this against what else we're seeing across the continent.
As you were mentioning, yeah, I think from the look of things now, I would say yes, there are some other prospects in West Africa, North Africa.
There's some significant discoveries.
In Ivory Coast where we've seen like really record developments.
The Italian explorer any It did like a.
Really quick time I think a couple of years between discovering the oil and producing it. They're going to do it as quickly as they can and for as long as the international oil companies have the appetite to do it.
This could be the last big development.
To Hotel Ceo mentioned like six to seven of these offshore vessels that can pump up to one hundred and eighty thousand barrels a day each. That would put Namibia on the higher end of OPEC members from Africa. If it's going to happen, it's probably going to happen in Namibia.
And so then Paul, what next for Namibia? Are are they hoping there could be more opportunities for investment? Is there something else potentially that could could be a boon at this point in time for the country.
It's really interesting because there are two things going on there, the oil developments, and there's a whole plan for green hydrogen projects because Namibia has, according to the World Banks is like the best solar radiation, are the best sunlight to do big solar projects, and because of the government's
openness to investment, that technology is still being developed. So you're seeing a really interesting concurrently these fossil fuel projects, these oil projects maybe the last of them, the last of the big ones, happening at the same time that these green hydrogen projects are being built, really as they're being as the technology is being developed.
Yeah, there's definitely a contrast of the end of the old and the beginning of the new.
Fascinating a bit of reporting. Paulbrik Ark, thank you so much for your time.
But you.
And as Paul just said, this moment can only be defined as the end of the old and the beginning of the new. But with neighboring and Golands still waiting to see the benefits of its own discoveries, expectations remain tempered in Namibia until they see the investments reach ordinary citizens. This program was produced by Adrian Bradley. If you like the episode, don't forget to comment and subscribe Wherever you are listening to this podcast, I'm Jennifer's Abasaga.
Thanks, as always for listening.