National Petroleum Corporation of Namibia (Namcor) interim managing director Ebson Uanguta noted that Namcor’s shareholding in natural resources is not capped at 10%. In fact, Uanguta noted that Namcor actually has a substantial working interest, up to 67%, in a number of exploration licences.
Some stakeholders have been complaining about Namibia’s reported 10% shareholding in oil and gas projects, arguing this is too little despite the lucrative sector that is attracting global attention.
“We need to recognise that offshore deep-sea exploration and discoveries require significant investment running into billions of dollars which cannot be done single-handedly by Namcor and the Namibian government. And that is why shareholding dilution becomes the only feasible proposition,” explained Uanguta while responding to questions from New Era.
He added that increasing the 10% shareholding in licences is a subject that is considered on a case-by-case basis and is dependent on various factors, including cost considerations and the involvement of multi-national oil companies.
While the 10% shareholding is a minimum, Uanguta advised it is crucial to be mindful of the financial and technical resources required for deep-sea exploration offshore. Namcor’s 10% interest is often on a carried basis, meaning international oil companies pay the exploration expenses on behalf of Namcor until commercial production starts.
Namibia has recently reported significant offshore oil and gas discoveries in the Orange basin, which has become one of the world’s most promising exploration hotspots. Namcor was reported as holding a 10% stake in these exploration deals.
In addition, Uanguta pointed out that Namibia is a desirable location for exploration companies due to its potential for significant oil and gas deposits, stable political and fiscal climate, and favourable ease of doing business ranking.
He noted that these elements play a meaningful part in the growing interest in and exploration of Namibia’s continental shelf. -mndjavera@nepc.com.na