Namibia's Oil Story Has a Gas Problem

The Orange Basin's oil comes with a great deal of gas. Shell wrote down its Namibian discoveries as uncommercial in January 2025 for that reason. TotalEnergies believes it can cope. Its plan for Venus is to reinject the gas to get the oil out, with no intention of selling it, since it already exports LNG from Angola and Nigeria and regards the Namibian gas as remote. That is rational for an operator that wants costs near $20 a barrel. For Namibia it means gas that could power the country is parked underground on day one.

Windhoek has pushed the majors to share infrastructure and bring gas ashore for processing and some regional power. The Venus decision is the first real test of that pressure. TotalEnergies says it must come before 2027 because contractor tenders will lapse, and I found no announced decision. In July the government approved a swap that makes TotalEnergies operator of both Venus and Mopane. That concentrates Namibia's bargaining on one counterparty, and it may also make a joint gas scheme easier to organise. That second point is my inference, not the company's stated plan.

Kudu is the project that shows how slowly gas moves. Chevron found it in 1974 and it has sat idle since. BW Energy holds 95 percent, with Namcor on 5 percent, and has pushed its investment decision from 2024 to 2025 and now to late 2026. It has also cut the plan from an 800 megawatt station to a modular plant of 200 to 400 megawatts. Last year's Kharas-1 well found liquids, which improves the economics.

CDH leans on Wood Mackenzie's finding that offshore gas rarely creates a domestic market on its own. Of about 15 African offshore gas producers, eight began with smaller onshore or nearshore projects and five with LNG exports. The published schedule deserves scepticism. CDH cites first power near Luderitz around 2027, yet BW has previously said first gas follows the investment decision by 30 to 40 months. A decision this December would put first gas around 2029 or 2030.

Timing matters because the LNG market is filling. The International Gas Union expects about 170 million tonnes a year of new liquefaction capacity between 2026 and 2028, so a Namibian export project would arrive late and have to prove its cost and carbon intensity. Shell still forecasts global LNG demand rising about 60 percent by 2040, so the window is open but narrowing.

Regional demand looks firmer. Namibia imports more than 60 percent of its electricity, and surplus Kudu power is meant to flow through the Southern African Power Pool. South Africa has the clearest need. Nearly 90 percent of its gas demand is met by Sasol, and Standard Bank describes a gas cliff from June 2028 when Sasol's Mozambican supply to third parties ends. The SADC gas master plan names a Walvis Bay to Cape Town corridor as a priority, which is the thread Western Cape industry should watch. Demand on paper does not finance a pipeline, though. South African buyers would have to commit through take-or-pay contracts.

CDH's central point is that gas needs a package and not a licence. Its list reads like a record of past failures.