Shell's 2026 exploration drilling programme in Namibia's PEL 39 block advances following the Merlin-1X discovery of light oil and promising reservoir quality, setting the stage for subsea systems procurement and supply chain planning across the Orange Basin's deepening drilling cycle.

Oil & Gas Industry 5 August 2026 • 5 min read

Shell's tenth well in PEL 39, the Merlin-1X, successfully penetrated the Coniacian play and has delivered the most promising subsurface results to date, indicating good reservoir quality with light oil and limited associated gas compared to prior results within the license. This turnaround reverses eighteen months of technical challenges and opens the Orange Basin's supply chain to sustained drilling activity through late 2026 and beyond.

The Merlin-1X discovery redefines commercial pathway

Earlier this year, Shell recorded an impairment charge of about $400 million on its PEL 39 investments, judging the hydrocarbons found so far to be commercially unviable. Industry reports said this decision was driven by technical and geological difficulties, including low rock permeability and high gas content, both of which complicate monetization. The light oil discovery at Merlin-1X in PEL 39 offshore Namibia was drilled by Northern Ocean's Deepsea Mira beginning in April 2026. Shell says that the results enhance its understanding of the basin and support continued evaluation of the resource and its commercial potential across the license, with further drilling later in 2026 under consideration as part of a broader exploratory appraisal programme.

Rig deployment and contract activity

Shell has awarded a $16 million drilling contract to Northern Ocean Limited (NOL) to explore Namibia's offshore Petroleum Exploration Licence 39 (PEL 39), with the exploration campaign executed using the Deepsea Mira semi-submersible rig scheduled to begin operations in April 2026 and expected to take about 45 days to complete. According to the terms of the agreement, one firm well will be drilled with an option for a second, potentially lifting NOL's total contracted backlog to $387 million. Shell's Country Chair encouraged local businesses to liaise with NOL regarding subcontracting linked to the rig's operations, as the deployment of the Deepsea Mira will allow Shell to continue derisking its acreage, refine geological models, and advance development scenarios.

Subsea systems procurement and mudline architecture

Deepwater exploration wells in PEL 39 operate at approximately 250 kilometres offshore Namibia in water depths exceeding 2,000 metres. Shell holds a 45% operating stake in PEL 39, while QatarEnergy holds 45% and state-run Namcor holds the remaining 10%. While Shell has not publicly released detailed subsea systems specifications for the 2026 campaign, regional precedent from neighbouring Angola indicates the scale of supply chain demand. Comparable deepwater production systems require 100 kilometres of rigid flowlines, 100 kilometres of flexible flowlines and 100 kilometres of umbilicals, with umbilical systems expected to be delivered within multi-month lead times. Subsea7 is a key contractor for subsea transport and installation and won a large Agogo scope that runs across offshore work from late 2024 into 2025. In the Orange Basin context, appraisal well mudline systems are typically contracted 9 to 18 months ahead of spud dates to accommodate engineering, procurement and manufacturing cycles.

Partner investment and regional drilling momentum

Shell has already made several discoveries in the area, including Graff, La Rona, and Jonker, with the upcoming program designed to gather more data to better define the existing finds and identify prospects with stronger oil potential before making a final investment decision. The Orange Basin has rapidly become a magnet for global exploration investment, with TotalEnergies, Galp, Chevron and Woodside all deepening their commitments. Together, these programmes are valued at an estimated US $1.5 billion through 2027, according to industry estimates compiled by Rystad Energy and Energy Intelligence. TotalEnergies is progressing its Venus project in Block 2913B for a final investment decision (FID) in 2026, with new data confirming better density and permeability compared to surrounding blocks. New Shell wildcats would please Namibian officials, who have been battling to maintain their timeline to first oil by 2030 or sooner in recent months.

Logistics hubs and contractor workforce mobilisation

Drilling activity has turned Lüderitz and Walvis Bay into logistics hubs, with rigs cycling continuously between appraisal and new exploration wells. The Deepsea Mira's April 2026 start date positions Walvis Bay as the primary mobilisation point for crew rotations, provisioning and subsea equipment staging. Day rates for Namibian rig contracts have risen due to the continued market recovery, averaging $365,000/day for mutually agreed deals. This rig cost inflation reflects increased demand for deepwater semi-submersible and drillship assets across West Africa and the Orange Basin simultaneously. Industrial and marine suppliers competing for mudline, riser and drilling-fluid packages will need to confirm equipment availability windows 6 to 12 months ahead of rig arrival to secure premium logistics corridors (Trans-Kunene to Angola, Trans-Kalahari routes to Botswana, and Walvis Bay to Ndola overland freight to Zambia).

About the Author
	Andre Klynsmith Co-Shareholder · Technology & Operations Andre's expertise spans technology, e-commerce, AI integration, and industrial procurement systems, driving Marine Ropes' digital transformation across Southern Africa. salesdesk@marine-ropes.com | marine-ropes.com