Chevron to Initiate Drilling Operations in Namibia's Walvis Basin

Chevron Corporation CVX, the U.S. oil and gas major, has stated that it plans to drill an exploration well in the Walvis Basin offshore Namibia. Namibia has recently gained significant attention from major oil-producing firms worldwide owing to promising discoveries in the region (like the Orange Basin), and it is anticipated to emerge as the next hotspot for exploration and production activities.

Chevron Eyes Opportunities in the Walvis Basin

Chevron’s subsidiary, Chevron Namibia Exploration Limited,expects to begin drilling activities offshore Namibia in 2026 or 2027. The drilling activities will be conducted within the Petroleum Exploration License (PEL) 82, in the Walvis Basin. The Walvis Basin lies to the north of the prolific Orange Basin, where several international energy players like TotalEnergies, Galp Energia and Shell have made successful oil discoveries.

CVX Targets Walvis Basin Despite Orange Basin Setback

In February 2025, Chevron acquired an 80% stake in PEL 82 from Custos Energy. The company has assumed the operatorship of the exploration license. Custos Energy retained a 10% stake in PEL 82, and the remaining 10% is owned by the National Petroleum Company of Namibia (“NAMCOR”). The Walvis Basin was described as the most promising opportunity within PEL 82, per Custos Energy.

This move expands CVX’s global exploration portfolio and marks a step closer to entering Namibia’s promising oil and gas sector. However, CVX mentioned in January that its first well in the Orange Basin did not yield promising results, and the hydrocarbon reserves found were not suitable for commercial exploitation.

Namibia's Untapped Potential Attracts International Energy Players

Namibia has attracted the attention of global oil companies owing to its significant untapped potential and promising offshore hydrocarbon finds. Many large energy players that previously focused on established oil-producing regions in Africa, like Nigeria and Angola, are now shifting their exploration efforts toward Namibia.

CVX’s Zacks Rank and Key Picks

CVX currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Archrock Inc. AROC, Nine Energy Service NINE and Kinder Morgan, Inc. KMI. While Archrock currently sports a Zacks Rank #1 (Strong Buy), Nine Energy Service and Kinder Morgan carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues. With natural gas playing an increasingly important role in the energy transition journey, AROC is expected to witness sustained demand for its services.

Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. It operates across key prolific basins in the United States, including the Permian, Eagle Ford, MidCon, Barnett, Bakken, Rockies, Marcellus and Utica, as well as throughout Canada. With a sustained demand for oil and gas in the future, the need for NINE’s services is anticipated to increase, which should position the company for growth in the long run.

Kinder Morgan is a leading North American midstream player with a stable and resilient business model, largely driven by take-or-pay contracts. KMI’s stable business model shields it from commodity price volatility, resulting in predictable earnings and facilitating reliable capital returns to its shareholders. In the first quarter of 2025, Kinder Morgan increased its quarterly cash dividend to 29.25 cents, reflecting an approximately 2% increase from the prior-year level. 

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This article originally published on Zacks Investment Research (zacks.com).

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