It’s Too Early to Tell If the Namibian Offshore Oil Play will Turn into another Large Source of Oil

Shell, TotalEnergies and Portugal’s Galp have made a series of discoveries of oil (and some gas) off the coast of the south-west African country in the past two years. Together these could produce hundreds of millions, if not billions, of barrels of oil. Chevron has applied to drill as many as 10 wells starting in the fourth quarter of this year. Investors in Sintana, with a C$122mn market value, have done well. Its share price has more than tripled over the past year. Of course, the law of averages could soon catch up with these explorers. The typical success rate for a series of offshore wells such as these is around a third. Such a high hit rate (88 per cent so far) might mean that this Orange Basin in Namibia could be highly prolific. But history suggests this kind of success rate will tail off in the next couple of years.

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