---
title: "Shell writes down Namibia oil discovery in blow to country"
description: "Shell will write down around $400-million over an oil discovery offshore Namibia that it deemed commercially unviable in a blow to the southern African country's efforts to become a crude producer."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "World"
author: "Reuters"
author_url: "https://www.dailymaverick.co.za/author/reuters/"
canonical_url: "https://www.dailymaverick.co.za/article/2025-01-08-shell-writes-down-namibia-oil-discovery-in-blow-to-country/"
published: "2025-01-08T23:36:34"
updated: "2025-01-08T23:36:36"
lang: "en-ZA"
word_count: 212
---

# Shell writes down Namibia oil discovery in blow to country

> Shell will write down around $400-million over an oil discovery offshore Namibia that it deemed commercially unviable in a blow to the southern African country's efforts to become a crude producer.

By Reuters · Published 9 January 2025, 01:36 SAST · Updated 9 January 2025, 01:36 SAST

## Key points
- Shell's grand oil dreams in Namibia have hit a geological snag, leaving them to ponder if their offshore treasures are more trouble than they're worth, with a $400 million write-off looming on the horizon.
- Shell's offshore oil and gas discoveries in Namibia's block PEL39 face challenges for commercial development, according to the company.
- The block, explored since 2022, has drawn global interest but is hindered by technical and geological difficulties.
- High natural gas content in the discoveries complicates extraction efforts, as noted by Shell's CEO.
- The company anticipates a $400-million exploration write-off, alongside another $300 million related to Colombian licenses.

## Content

By Ron Bousso

Shell told Reuters that discovered oil and gas resources in offshore block PEL39 in Namibia "cannot currently be confirmed for commercial development."

Shell and its partners QatarEnergy and Namibia's national oil company first discovered hydrocarbon in block PEL39 in 2022, which together with another discovery TotalEnergies made in a nearby block sparked huge global interest in the southern African country which has no oil and gas production.

Shell drilled nine wells in the licence over the past three years, making [several other discoveries](https://www.reuters.com/business/energy/shell-finds-hydrocarbons-latest-namibia-exploration-well-2023-07-12/).

More recently, Portuguese oil company Galp also made [a major discovery](https://www.reuters.com/business/energy/portugals-galp-says-field-off-namibia-could-contain-10-bln-barrels-oil-2024-04-21/) in a different offshore licence.

But the British company encountered technical and geological difficulties for the development of the resources.

CEO Wael Sawan told analysts on 31 October that Namibia's acreage was "very challenging," and that the lower permeability of the rock made extracting oil and gas harder.

Sources told Reuters that the offshore discoveries also had a [high natural gas content](https://www.reuters.com/business/energy/gas-may-dash-big-oils-namibian-dreams-2024-11-07/), further complicating their development.

The company said in [a trading update](https://www.reuters.com/business/energy/shell-trims-q4-lng-production-outlook-2025-01-08/) ahead of fourth quarter results on Jan. 30 that it expects to take an exploration write off of around $400-million, without providing details.

It will take another $300-million write-off related mainly to exploration licences in Colombia, the company said. **DM**