Shell Steps Up Offshore Drilling After Strongest Namibia Discovery

Shell plans to expand appraisal drilling on Namibia’s offshore PEL 39 licence after its latest exploration well delivered the strongest results recorded on the block since drilling began in 2021. The decision follows the successful Merlin-1X well, which encountered light crude oil with limited associated gas. Earlier exploration wells had identified hydrocarbons but were affected by poor reservoir permeability and higher gas content, limiting their commercial potential. The announcement comes after Shell wrote down its Namibian assets by $400 million in January 2025, saying previous discoveries on the licence were not commercially viable in the short term.

According to Mining & Energy Namibia, Shell confirmed the expanded appraisal programme during its second-quarter 2026 earnings presentation on 31 July. Chief Executive Wael Sawan said the company will carry out additional drilling to assess the commercial potential of the latest discovery.

Merlin-1X Delivers Improved Results

Shell drilled Merlin-1X in April with partners QatarEnergy and NAMCOR, Namibia’s national oil company. It is the tenth exploration well completed on the PEL 39 licence. Sawan said Merlin-1X recorded the best reservoir characteristics seen across the licence area. The well also opened a new exploration target within the block.

“What strikes me most is the difference in the reservoir and fluid characteristics. It showed some of the best permeability and porosity we have seen across the block, and it opened up a new exploration horizon for us,” he said. Shell has not disclosed how many appraisal wells it intends to drill or when the programme will begin.

Orange Basin Remains in Focus

The PEL 39 licence covers about 12,000 square kilometres and is located roughly 250 kilometres offshore Namibia. Shell has explored the block since December 2021, when the Graff-1X well confirmed Namibia’s first major offshore light oil discovery. The company later drilled several additional wells, including Jonker-1X and La Rona-1X, but those discoveries did not establish commercial viability.

Shell’s latest results come as exploration activity continues across Namibia’s Orange Basin, where international energy companies are assessing several offshore discoveries. TotalEnergies is advancing development of the Venus project, which is estimated to contain more than one billion barrels of oil and is targeting first production around 2030. Shell’s expanded appraisal programme will determine whether PEL 39 can also progress towards commercial development.