Reports today suggest Shell has made a significant oil and gas discovery at an offshore well in Namibia, industry sources told Reuters.

It unclear if the discoveries are big enough for Shell to go ahead with the development of the country's first deep water field, the sources said.

Shell, which started drilling the Graff-1 well in Namibia’s waters in December, has found resources estimated at 250-300 million barrels of oil and gas equivalent, one of the sources told Reuters.

“Namibia is again under the spotlight as Shell bank on the highly anticipated Graff-1 to unlock frontier plays in the Orange Sub-basin,” Erik Meyer and Hugh Ewan, Senior Technical Research Analysts at IHS Markit, said in a note just after Shell spud the Graff-1 well in December.

“If successful, Graff-1 could spark significant international investment to a region which has had minimal E&P activity over the last 25 years,” they added.

However, the analysts stressed that a discovery has to be sizeable to be commercially viable. Shell is likely targeting at least 210 million barrels of recoverable resources, they said.

Shell holds a 45% stake in the offshore Petroleum Exploration License 39 (PEL 39) with a 45% interest held by Qatar Petroleum and a 10% held by the National Petroleum Corporation of Namibia (NAMCOR).

KeyFacts Energy: Shell Namibia country profile