With tensions escalating in the Middle East amid the ongoing war involving Israel, the United States of America and Iran, global oil markets have reacted sharply, with crude prices recently surpassing the US$100 per barrel mark. These and other geopolitical upheavals have created extreme market volatility and have severely disrupted global trade.
This raises fresh concerns for fuel-importing nations like Namibia. While Namibia has made promising offshore oil discoveries in recent years, the country remains years away from production and remains heavily reliant on imported fuel.
In this context, the role of institutions like the Ministry of Industry, Mines and Energy and the National Petroleum Corporation of Namibia (Namcor) becomes even more critical in safeguarding supply and stabilising prices. This week, New Era’s Head of Business and Lifestyle, Edgar Brandt (EB), engaged Victoria Nepembe (VN), Acting Terminal Manager at the National Oil Storage Facility (NOSF), to unpack how the country is navigating these global shocks while preparing for a future as a potential oil producer.
EB: Good morning, and thank you for the opportunity. You are Deputy Director of the National Energy Fund (NEF) in the Ministry of Industries, Mines and Energy, and you have been seconded to the National Oil Storage Facility to serve as terminal manager. Please provide us with a brief overview of these two institutions.
VN: The ministry, as the regulator, is a government institution responsible for policy development. Once developed, those policies are implemented by industry players, and this is where Namcor comes in. Namcor is also a statutory company established by the Act of Parliament as a national oil company with the mandate to import fuel into the country on behalf of the government.
The government is the sole owner of the NOSF, just as it is the sole owner of Namcor. The National Oil Storage Facility handles all petroleum products entering Namibia.
So basically, what we do here is handle, offload, discharge vessels, store products, and then load products onto trucks for national or international consumption. Basically, we do not trade here at NOSF; we do not import, we do not sell at all. It’s like an intermediary; we act on orders. So NOSF itself is just a facility; it’s not a company.
EB: In terms of maintenance, this facility was constructed more than five years ago. What are the major maintenance issues on the horizon?
VN: Yes. This facility is actually quite capital intensive. It’s quite a lot of machinery, equipment and instruments. And this equipment is operated as per the OEM (Original Equipment Manufacturer). So, whatever needs to be done is based on the original equipment manufacturer’s recommendations and advice.
So, yes, the facility has now been operated for five years, and some of this equipment needs regular as well as annual maintenance. So, maintenance is actually the highest expense here.
We have a maintenance contractor on site whose contract is ending on 31 March. However, another maintenance contractor has been appointed for that work. Everything is under control as far as maintenance is concerned.
EB: Obviously, it is a very strict environment that you are operating in when you are transferring the product from the vessels onshore. What are the fuel importing standards the NOSF adheres to?
VN: Currently, we are using the SANS (South African National Standards). It is only recently that the ministry has undertaken a project with the Namibia Standard Institution to adopt the SANS and Namibianise them to become NAM standards.
EB: In terms of the vessels that offload the product, what safety standards do they have to adhere to make use of this facility?
VN: There are quite a lot of safety standards. There are the ISO standards we are guided by. We also comply to the international ship standards enforced by NamPort.
When the vessels berth at the jetty, we first have to assess the crew’s health. Then the next relevant authority, customs, and then the immigration go on board to clear the vessel. Customs look at what is on board, where it is destined for, for tax purposes. And then NamPort also goes on board to verify that the vessel is up to standard and meets the port restriction limit, and that is when our own NOSF operators are called on board to hold a pre-discharge meeting. We have to know how much fuel is on board and the rate at which it will be discharged.
So, it takes us on average three days to discharge before the next vessel can call. It’s quite an exercise. Also, from a safety perspective, our team checks whether the vessel meets safety rules and specifications and has sufficient firefighting equipment. They check what is on board the ship, so in case there is any spill, in case there is any incident of fire, it can be fought from both sides, not only by the facility, but also from the vessel.
EB: You mentioned earlier the number of products that the facility can handle. What goes into preparing this facility to make use of different products?
VN: The facility was built to accommodate five products. There are two types of diesel: ULP, HFO, and Jet A1. Those are the products currently stored here. And each product has its own designated tank. And each product has its own designated pipeline that brings products from the jetty.
If it’s diesel, we discharge straight into the diesel line, into the diesel storage tank. If it’s ULP, we discharge straight into the ULP tank using the ULP pipeline. Each product has its own pipeline.
EB: Is there any scope for Namibian entrepreneurs to also start using this facility? To make this industry open to Namibian entrepreneurs?
VN: Yes. Currently, looking at the available space or capacity, we have only one company hosted here for storage: Validus. However, we have also received quite a number of applications from many other local companies looking for storage space for various products. Some are looking for space to bring in diesel and have it stored here. Some are looking for space to bring in ULP and have it stored here. Others are looking for space to bring in Jet A1 and store it here.
But the strategies we are trying to put in place are meant to ensure that we do not have a long-term storage agreement. To level the playing field for everyone, the NOSF is considering providing storage for 30 days.
EB: And these applications that you mentioned from different companies to make use of the facility, when do you foresee giving them feedback?
VN: The government is busy reviewing the NOSF fees. The fees initially charged here were below the market-related fees charged in the industry. And once they are complete, we would provide feedback indicating the cost based on the volumes they want to store, exactly what they are required to pay, and which services they are paying for. Once that exercise with the government is complete, we will give them proper feedback.