Oil exploration bodes well for Namibia
Major exploration earmarked for 2024
Good prospecting results by mining companies Shell and TotalEnergies, with results anticipated to be announced soon, should drive up exploration.
PSG Namibia says good prospecting results by oil majors TotalEnergies and Shell could bolster further exploration in the Orange Basin. It made the comments in a brief on the economy following the release of gross domestic product (GDP) numbers by the Namibia Statistics Agency (NSA) last week.“Continued growth in oil exploration is probable – as the minister of mines and energy has stated that as many as five oil drilling rigs could be operating in the Orange Basin at the start of the year – up from a record total of three in 2023,” PSG said.
The Orange Basin could attract further interest from oil companies if TotalEnergies' and Shell's oil well appraisals in the first half of 2024 yield positive results, it noted.
Uranium
Developments in the uranium sector also bode well for Namibia, as uranium prices are currently experiencing a rebound.
“Uranium prices are at a 15-year high, which bodes well for local uranium production, with bullish uranium analysts expecting continued price growth next year on the back of pledges from 20 countries to triple nuclear energy by 2050 following the recent Conferences of Parties summit in Dubai last year,” PSG said.
“Paladin Energy plans to reopen its Langer Heinrich mine in the first quarter of 2024, which will bring the number of operating uranium mines in Namibia back to three,” it added.
Outlook
The closure of B2Gold’s Otjikoto gold mine as well as low diamond prices would pose a challenge to the mining industry, PSG noted.
“The Otjikoto gold mine – one of only two operating gold mines in the country – is scheduled to start a phased closure in 2024, which will hit overall gold production next year. The diamond market is facing low prices and several other challenges, which will prompt De Beers to curb supply to diamond buyers in 2024,” it said.
Reflecting on the last year, PSG described it as a good year for Namibia.
“2023 was a relatively good year for economic growth in Namibia, thanks mainly to increased oil exploration, improved uranium, diamond and gold production, and higher local electricity production owing to stronger water flows at the Ruacana hydropower stations,” it said.