Shell poised to spud Namibia appraisal well

Shell is within hours of spudding an appraisal well on its major Graff oil discovery offshore Namibia, a find that could contain about 400 million barrels of oil.

Informed sources say that the Valaris DS 10 drillship is ready to begin drilling on 15 February, adding that the location of the probe and Shell’s eagerness to quickly spud a delineation well, both indicate how big this deep-water discovery may be.

On completing Graff-1 last month in Block 2913A, the drillship returned to Walvis Bay for restocking, but is now on location at the Graff-2 well site, according to tracking data from VesselsValue.

The rig looks set to spud Graff-2 in Block 2914B, about eight kilometres north-east of the original discovery well.

One exploration source suggested the distance between the locations of the two wells suggests how big the areal extent of the Graff structure is and supports suggestions it could hold about 400 million barrels of oil, possibly more, some 100 million barrels larger than it was previously suggested.

While neither Shell nor Namcor — its state-owned partner in the well — have unveiled resources estimates for the discovery, a briefing note for clients issued by Wood Mackenzie earlier this month said: “We understand the well met its pre-drill estimate of between 500 million and 1 billion barrels. We assume 700 million barrels is recoverable.”

WoodMac noted that this result is “a game changer for Namibia … and ends a streak of dry wells dating back to the discovery of the Kudu gas field in 1974”.

The client note added that “Graff… could become a core area for Shell,” highlighting that Namibia’s fiscal terms are competitive with a government share of 57%, low above-ground risks and a favourable business environment.

Assuming its resource estimates are correct, WoodMac suggested it could support a potential project costing US$12 billion — some US$1.3 billion more than Namibia’s gross domestic product in 2020 — and producing 190,000 barrels per day at peak.

First oil would flow in 2027 from more than 35 subsea wells to a leased floating production, storage and offloading vessel moored in 1900 metres of water, the consultancy added.

Shell had not replied to questions at press time.-Upstream

Rate this item
(0 votes)
Last modified on Thursday, 17 February 2022 17:38

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

Joomla! Debug Console

Session

Profile Information

Memory Usage

Database Queries