Shell has commenced a new exploration drilling campaign offshore Namibia in Petroleum Exploration Licence (PEL) 39, targeting the 'Millenium Star' reservoir. This follows a significant commercial setback in early 2025, where the company wrote off $400 million after determining that five previous oil and gas discoveries in the block—Graff, Jonker, Enigma, La Rona, and Lesedi—were not commercially viable due to reservoir challenges.

New Drilling Campaign and Target

After halting operations to better understand the subsurface, Shell chartered the Deepsea Mira rig in late 2025. The rig is now drilling the Merlin-1X well, located approximately 10 kilometres east of the Lesedi discovery and 14 kilometres north of Graff. The well is targeting an Upper Cretaceous Coniacian play, an interval previously encountered and flow-tested in the deeper section of the Graff-1X well in 2022. Initial flow potential from that test was encouraging, though no quantitative data was released.

Geological Significance and Potential

Analysts identify the Coniacian interval as the most promising play in PEL 39 due to its superior reservoir quality. A successful discovery at Merlin-1X could potentially unlock earlier finds in the licence area, enabling a clustered development. The interval is metaphorically referred to as the 'Millenium Star,' likening its potential value to that of a famed flawless diamond.

Context and Future Outlook

Shell's exploration activities in the Orange basin began with the play-opening Graff discovery in early 2022, which was later overshadowed by major finds from TotalEnergies and Galp Energia in the region. Despite the previous commercial disappointments and the write-off—attributed to reservoir deliverability issues and high gas content—Shell emphasizes its continued commitment to exploring Namibia's offshore potential in collaboration with its partners and the government. The company plans further exploration drilling in PEL 39 during 2026.