Namibia’s offshore oil projects delayed by high gas-to-oil ratio, pushing production goals to 2030s

The unexpectedly high share of gas in Namibia’s offshore oil fields will slow development and may ultimately even make projects unprofitable.

This is according to a Reuters report published on Thursday.

“All our discoveries have a very high gas-to-oil ratio,” petroleum commissioner Maggy Shino said at an industry conference in October.

Namibian law prohibits the flaring of gas, which means burning it as a waste product and releasing carbon dioxide into the atmosphere.

To make use of the oil fields, companies would therefore have to find an alternative way of dealing with gas.

One option is to simply inject it back into the reservoir, which is associated with considerable cost, according to TotalEnergies chief executive Patrick Pouyanne.

The other option is to process the gas for consumption, which also requires additional investments and infrastructure.

The government is in talks with Shell, TotalEnergies, Galp and BW Energy about a gas development plan, Reuters reports.

“We really want to utilise the gas and generate as much value as possible,” Shino said.

The idea is to build a gas pipeline from the offshore fields to Kudu power station. The power plant would require significant upgrades in order to process the unexpected offshore gas.

The additional work could delay production into the 2030s, making it harder to monetise.

This represents a major setback for oil companies as well as the government’s plans.

Initially, the government had planned to start oil production by 2026.