As you can see, the plains of the Shell discoveries Jonker, Graff , Lesedi, Rona and Enigma are smaller than the plains of Venus, Mopane or Saturn.
The size of the plain of the reservoir is a multiplier when the volume of the original oil in place is calculated. The bigger the better.
I think that the Shell write down was no easy decision for Shell. And I think that the too small OOIP combined with the gas oil ratio and the green wish of the Namibian politician (forbidding gas flaring) ended up with a too small result for the profitability calculation for a major as Shell, not justifying the investment for the installation of FPSOs respectively production platforms for the 5 mentioned Shell discoveries. And producing all 5 reservoirs with one plattform is probably not possible because of the too long distances between the fields as well? Another hint that it was difficult for Shell to decide: Shell needed to drill 7 (!) wells to say there is no commerciality for them there. If it would have been obvious Shell would have stopped drilling after the first or third well, I would guess?
PCL Price at posting:
2.0¢ Sentiment: Hold Disclosure: Held
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