The race to unlock Namibia’s potentially vast offshore oil wealth is intensifying, with the BP and Eni joint venture, Azule Energy, declaring its ambition to accelerate development and be among the first to bring crude to market from one of the world’s most exciting new exploration frontiers. This push signifies a crucial phase for Namibia, potentially transforming its economy, and highlights the fierce competition unfolding between energy giants in the South Atlantic.
Azule Energy, formed in 2022 through the merger of the two supermajors’ Angolan assets but with ambitions extending across Southern Africa, is setting an aggressive timeline for its operations in Namibian waters. The venture recently negotiated a stake in the promising Block 2914A, partnering with the operator Rhino Resources. This move proved prescient when, in April of this year, the partners struck oil at the Capricornus exploration well. Buoyed by this discovery, Azule CEO Adriano Mangini has outlined a challenging but achievable target: reaching a Final Investment Decision (FID) by the end of 2026. Successfully hitting this milestone would pave the way for first oil production potentially as early as 2029.
“Reaching FID next year is challenging but possible,” Mangini stated in an interview with Bloomberg last week. This confidence stems from the perceived quality of the Capricornus find and the joint venture’s commitment. “We’re ready to stay in Namibia for many years because we know what we already have,” he emphasized, signalling Azule’s long-term view on the country’s potential. Crucially, Azule holds an option to take over operatorship of the block during the crucial development phase, with Mangini noting discussions are ongoing and that the partnership with Rhino is moving “in a productive way, in a full collaboration way.”
The Namibian hotspot: From obscurity to global spotlight
Azule’s accelerated plans place it directly in competition with French energy major TotalEnergies, which is also targeting first oil around 2029 from its significant Venus discovery in the Orange Basin. Namibia’s transformation into a global exploration hotspot is relatively recent but dramatic. Just three years ago, major discoveries by TotalEnergies (Venus-1X in Block 2913B) and Shell (Graff-1X, La Rona-1X, and Jonker-1X in adjacent Block 2913A and PEL 39) shattered decades of exploration disappointment. These finds, located in deep waters off the country’s southern coast, revealed a geological province bearing striking similarities to the prolific pre-salt plays offshore Brazil – a region that revolutionized that country’s oil industry.
The Orange Basin’s potential is immense. Initial estimates suggested resources in the billions of barrels, instantly catapulting Namibia onto the radar of every major international oil company. The prospect of a new, large-scale hydrocarbon province emerging in a stable African democracy offered significant strategic value, particularly as companies seek to diversify portfolios and secure new resources amidst global supply concerns and longer-term energy transition pressures. Exploration licenses were snapped up, and a flurry of seismic surveys and drilling campaigns ensued.
Challenges amidst the optimism: A reality check
However, the path from discovery to production is rarely smooth, especially in deepwater frontier regions with complex geology. The initial euphoria has been tempered by recent setbacks. A string of exploration wells drilled by various operators in the past year have yielded disappointing results (dry holes or non-commercial finds), underscoring the geological uncertainty inherent in such new plays. Furthermore, Shell’s experience served as a stark reminder of the technical hurdles. The company was forced to take a substantial $400 million impairment on its Namibian exploration portfolio in 2023, citing technical and geological challenges encountered during appraisal activities. This writedown partially dampened the previously unbridled optimism surrounding the basin’s immediate potential.
These challenges highlight the significance of Azule’s “fast-track” ambition. Achieving FID within approximately 18 months for a deepwater project following a discovery requires exceptional confidence in the resource volume, reservoir quality, and development concept. It demands streamlined decision-making between partners, rapid progress on complex engineering studies (including subsea infrastructure and potentially an FPSO vessel), securing regulatory approvals, and navigating the complexities of commercial agreements. Any delays in this intricate process can push production timelines back significantly and inflate costs.
The race for first Oil: Prestige and advantage
The competition to achieve “first oil” in Namibia carries more than just symbolic importance. Rhino Resources CEO Travis Smithard underscored this ambition earlier this week, stating his company has the “ambition” to be the first to produce. For the winner, there are tangible benefits: securing favorable terms with service providers by establishing an early operational base, setting industry standards within the nascent Namibian regulatory environment, capturing valuable market share, and gaining significant geopolitical and reputational capital as the pioneer of Namibia’s oil era. It also provides a head start in understanding the basin’s unique characteristics, offering operational learnings that can be applied to subsequent developments.
For Namibia itself, the successful and timely development of its oil resources represents a potential economic watershed. The government is acutely aware of the transformative opportunity and the “resource curse” pitfalls experienced elsewhere. Significant effort is being directed towards establishing robust legal and fiscal frameworks to ensure the nation benefits maximally from its resources through royalties, taxes, local content development, and job creation. The prospect of first oil within the next decade provides a concrete timeline around which national planning and infrastructure development can accelerate.
Strategic stakes and future prospects
Azule Energy’s aggressive posture in Namibia reflects the strategic importance both BP and Eni place on accessing new, potentially high-margin resources. While both companies have committed publicly to transitioning towards lower-carbon energy, large-scale conventional oil discoveries like those in Namibia remain critical for funding that transition and meeting ongoing global energy demand, particularly in the near-to-medium term. Success in Namibia would bolster their reserve base and production outlooks significantly.
The coming 18 months will be pivotal for Azule and Block 2914A. Appraisal work to delineate the size and commercial viability of the Capricornus discovery will intensify. Engineering teams will work feverishly on development concepts. Negotiations with regulators, potential financiers, and service providers will accelerate. Mangini’s confidence will be tested against the hard realities of deepwater development timelines and costs. Meanwhile, TotalEnergies and Shell will continue advancing their own major discoveries, ensuring the race to first Namibian oil remains fiercely contested.
The story unfolding offshore Namibia is a high-stakes drama of geology, technology, finance, and geopolitics. Azule Energy’s declaration of intent to fast-track Capricornus places it firmly at the forefront of this race. If successful, it could see BP and Eni, through their Azule venture, not only winning the title of “first producer” but also playing a defining role in launching Namibia as a significant new oil producer on the global stage by the end of this decade.