Chevron and Equinor Strengthen Namibia's Offshore Oil Exploration

The deal comes at an important time for Namibia, where international energy companies are increasing exploration activity following a series of promising offshore discoveries. The Orange Basin has attracted major players including TotalEnergies SE TTE, QatarEnergy, Shell plc SHEL and other international exploration companies, making the region an increasingly important frontier for the global oil and gas sector.

Chevron Maintains a Strong Position

For Chevron, the agreement represents a strategic way to share exploration exposure while retaining operatorship of PEL 90. Before the transaction, Chevron subsidiary Harmattan Energy held a 52.5% interest in the license. Following completion, Chevron’s interest will be reduced to 35.1%, while QatarEnergy will hold 27.5%, Equinor 17.4%, Trago Energy 10% and Namibia’s state-owned oil company, NAMCOR, 10%.

The transaction remains subject to regulatory approvals and completion procedures. Financial terms of the agreement have not been disclosed.

Although Chevron is reducing its participating interest, it will remain the operator and continue to play the leading role in exploration activities on the license. This is important because offshore exploration requires significant capital and carries substantial geological risk. Bringing Equinor into the project allows Chevron to share that risk while maintaining a meaningful position in what could become an important exploration asset.

Orange Basin’s Growing Importance

Namibia’s Orange Basin has become a major focus for international oil companies because of its geological potential and the discoveries made in the region.

The basin stretches along the Atlantic margin of southern Africa and has attracted significant exploration investment in recent years. Discoveries in nearby areas have increased expectations that Namibia could eventually develop into a significant offshore oil producer.

However, successful exploration does not necessarily translate into commercial production. Companies must determine whether discoveries are large enough, technically feasible and economically viable to develop. Deepwater projects can require billions of dollars in investment, as well as extensive infrastructure and long-term planning.

This makes every exploration well an important test for companies operating in the basin.

Chevron Plans Another Exploration Well

Chevron's next major exploration step on PEL 90 is the planned Nabba-1X exploration well, which is expected to be drilled in the fourth quarter of 2026. The well follows Chevron’s earlier exploration activity on PEL 90. The company drilled the Kapana-1X well in 2025, but the well did not encounter commercial quantities of hydrocarbons. Despite the disappointing result, the drilling campaign provided valuable geological information that can be used to refine exploration models and identify future targets.

Chevron’s decision to continue drilling demonstrates that it has not abandoned the potential of PEL 90. Instead, the company is using information from earlier exploration to guide its next campaign.

The Nabba-1X well could therefore become an important milestone for Chevron and its partners. A successful result could increase confidence in the license and support additional appraisal and exploration activity. At the same time, an unsuccessful result would provide further geological information and help the partners better understand the risks associated with the area.

Equinor Enters Namibia

For Equinor, the agreement represents a significant strategic move into Namibia.

The Norwegian company is expanding its international upstream portfolio and sees the Orange Basin as an attractive exploration opportunity. By acquiring a 17.4% interest in PEL 90, Equinor gains exposure to a potentially high-impact project while partnering with Chevron, an experienced operator in offshore exploration.

Equinor’s entry also demonstrates the increasing importance of Namibia on the international energy map. The company has indicated that the transaction fits the strategy of strengthening its oil and gas portfolio and gaining access to promising exploration opportunities.

If exploration proves successful, Equinor could potentially use its entry into Namibia as a platform for further investment in the country.

What the Partnership Means for Namibia

The agreement is also significant for Namibia’s ambitions to develop its energy sector.

Increased participation by international energy companies can bring capital, technology, expertise and employment opportunities to the country. Successful offshore developments could generate government revenues and support the growth of local energy-related industries.

At the same time, Namibia’s oil ambitions remain at the exploration stage. Discoveries must still be appraised, commerciality must be established and major infrastructure decisions must be made before production can begin.

The Chevron-Equinor partnership therefore represents an important step, but not the final stage of Namibia’s offshore oil journey.

Looking Ahead

The Chevron-Equinor agreement highlights the growing competition and cooperation among major energy companies seeking opportunities in Namibia’s Orange Basin.

Chevron will remain the operator of PEL 90 and retain a substantial 35.1% interest, while Equinor gains a foothold in Namibia through its 17.4% stake. Together with QatarEnergy, Trago Energy and NAMCOR, the partners will now focus on the next phase of exploration.

The planned Nabba-1X well later in 2026 will be closely watched by the industry. Its results could provide a clearer indication of the potential of PEL 90 and influence future exploration decisions in the Orange Basin.

For Chevron, the partnership represents a continued commitment to Namibia despite the challenges of frontier exploration. For Equinor, it provides a new opportunity in an emerging oil province. And for Namibia, it reinforces the country’s growing importance in the global offshore energy industry.

As drilling activity continues, the Orange Basin remains a region of both opportunity and uncertainty. The success of Chevron and Equinor’s partnership will ultimately depend on what their next exploration wells reveal beneath Namibia’s offshore waters.

CVX's Zacks Rank

Currently, CVX, SHEL and TTE carry a Zacks Rank #3 (Hold) each, while EQNR has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shell is valued at $256.86 billion. The company is a diversified energy company with major operations in oil and gas production, LNG, refining, energy trading, and fuel marketing. Shell also maintains a presence in power and renewable energy.

TotalEnergies is valued at $212.51 billion. The company operates across the energy sector, combining oil and gas production with refining, fuel and chemical activities, LNG, power generation, and growing renewable energy investments.

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