Shell Makes 'Encouraging' Oil Discovery Offshore Namibia

Shell and its partners have made what the oil major described as an "encouraging" discovery in a closely-watched exploration well off the coast of Namibia, which could spark a wave of investment in the south African country.

Shell said in a statement that results from the deep water Graff-1 well revealed "the presence of a working petroleum system with light oil" and that Shell and its partners would continue to assess how much oil could be recovered.

Shell holds a 45% stake in the offshore Petroleum Exploration License 39 (PEL 39), where the well is located, with a 45% interest held by Qatar Petroleum and 10% held by the National Petroleum Corporation of Namibia (NAMCOR).

"We hope that this discovery puts to rest doubts about the hydrocarbon potential of Namibia and opens a new dawn in the country's future prosperity," NAMCOR Managing Director Immanuel Mulunga said in a statement.

Reuters last week reported a discovery had been made at the well offshore Namibia, which currently does not produce any fossil fuel.