LONDON, Jan 8 (Reuters) – Shell SHEL.L will write down around $400 million over an oil discovery offshore Namibia that it deemed commercially unviable in a blow to the southern African country’s efforts to become a crude producer.

Shell told Reuters that discovered oil and gas resources in offshore block PEL39 in Namibia “cannot currently be confirmed for commercial development.”

Shell and its partners QatarEnergy and Namibia’s national oil company first discovered hydrocarbon in block PEL39 in 2022, which together with another discovery TotalEnergies TTEF.PAmade in a nearby block sparked huge global interest in the southern African country which has no oil and gas production.

Shell drilled nine wells in the licence over the past three years, making several other discoveries.

More recently, Portuguese oil company Galp also made a major discovery in a different offshore licence.

But the British company encountered technical and geological difficulties for the development of the resources.

CEO Wael Sawan told analysts on Oct. 31 that Namibia’s acreage was “very challenging,” and that the lower permeability of the rock made extracting oil and gas harder.

Sources told Reuters that the offshore discoveries also had a high natural gas content, further complicating their development.

The company said in a trading update ahead of fourth quarter results on Jan. 30 that it expects to take an exploration write off of around $400 million, without providing details.

It will take another $300 million write off related mainly to exploration licences in Colombia, the company said.

(Reporting by Ron Bousso; Editing by Chris Reese and Nick Zieminski)