Namibia has been hogging international headlines following the recent discovery of oil off the country’s coast.
A fortnight ago, National Petroleum Corporation of Namibia confirmed major light oil and associated gas discovery, this time on the Venus-1X prospect, located in block 2913B (PEL 56) in the Orange Basin, offshore southern Namibia. The confirmation followed Shell’s recent Graff-1 discovery in the same vicinity, although the volumes of oil and gas in the exploration areas have not yet been announced.
The exploration area is operated by a joint venture group that includes Total Energies (40%), Qatar Energy (30%), Impact Oil and Gas (20%), and Namcor (10%).
Although the economic potential of such findings has not yet been confirmed, experts have predicted an equivalent N$53 billion in annual revenues for the State. There is, therefore, no doubt the recent developments, as far as oil discovery is concerned, have the potential to drastically improve the nation’s revenue, increase employment opportunities and create the necessary industrial hubs. Obviously, there is the danger and fears the discovery could be mired in politics and lead to a curse as seen in other resource-rich nations. The discovery of oil and gas has previously been accompanied by armed conflicts in parts of Africa and the Middle East.
However, as international relations minister Netumbo Nandi-Ndaitwah recently pointed out, the discovery of oil should not bring instability but shared prosperity. “We are hoping that should the oil discovery come true, it will be exploited in a way that it benefits the Namibian people,” she said. “As we stand now, our peace is very fragile when you have so many young people unemployed. We are happy to have oil. What we are hoping is that it will contribute to shared prosperity,” the minister was quoted as saying. Namibia must accrue maximum gains, including the creation of legislative frameworks, checks and balances in ensuring the oil industry creates a unique business opportunity for the country’s economic development.
Experts in the field also agree these discoveries could attract local and foreign investments in exploration and development from international oil companies who might be interested in pursuing further business opportunities in Namibia. The oil discoveries could have a spin-off effect on economic activity and could significantly boost the country’s GDP growth.
Namibia would just not be an oil producing nation, but the revenue generated could fundamentally transform the economy and enable it to meet its key sustainable development goals.
Therefore, a well-managed oil sector can bring huge positive and sustainable impacts through socioeconomic growth and positive economic externalities. Moreover, industry insiders believe the idea that a resource can be a curse is not only counterintuitive but counterfactual.
This is because Namibia has laws to address all levels of mismanagement and corruption if that is the implication that underpins the idea that a resource can be a curse. We should, therefore, see the oil discovery as a massive game-changer, which will allow us at the same time to adopt and embrace tougher legislative and policy reforms as far as its management is concerned.