The National Petroleum Corporation of Namibia (Namcor) anticipates benefiting from oil finds within Namibian borders due to its average 10% stake in petroleum exploration licences issued. However, the corporation has emphasised that the extent of these anticipated gains is currently under evaluation.
“Before making public declarations about the profits earned by international oil companies, it’s crucial to have a well-informed perspective. While discussions on this topic can often become impassioned, it’s important to underscore the significant risks linked to upstream oil exploration,” Namcor stated in response to New Era queries.
To put all aspects into perspective, the corporation pointed out that on average, only one in five exploration projects succeed. This low success rate is indicative of the substantial risk-to-profit ratio involved when a discovery is made.
Namcor’s responsibilities are clearly outlined in the Petroleum Act and are further reinforced by a strategic five-year roadmap, combined with annual business strategies submitted to the Ministry of Public Enterprises.
“Our commitment to the community is unwavering, demonstrated by an average contribution of about N$1 million dollars towards community betterment,” Namcor stated.
Meanwhile, in the broader African landscape, there have been groundbreaking oil and gas finds, particularly in East Africa and offshore West Africa. Concurrently, African governments are keen on enhancing national involvement in their upstream petroleum sector.
As such, many nations are either establishing national oil companies (NOCs), or revamping existing companies to assume more comprehensive roles.
Namcor stated that this strategic move is aimed at ensuring that African nations optimise the value of their oil and gas reserves to fuel industrial growth.
“However, it is paramount to refine governance structures guiding the operations of these NOCs. Taking a leaf from Middle Eastern nations, African countries can bolster their NOCs, enabling them to lead exploration efforts, oversee foreign oil entities, select partners based on technical and financial competence, and affirm the capability of nationals in this sector,” they continued.
As Namibia’s national oil entity, Namcor shoulders the responsibility of establishing fuel retail outlets in remote regions, sometimes with marginal or even no profit.
“With rising profits, our intention is to amplify our contribution to community development through our Corporate Social Responsibility policy. It remains premature to specify expected future profits, especially when the commercial assessment of discovered wells is still in progress,” the corporation clarified.
Retail
Namcor marked its debut in the downstream sector in August 2019 with the launch of its inaugural branded service station at the Hosea Kutako International Airport. The newest addition, located in the town of Gobabis within the Omaheke Region, opened its doors on 28 April 2023. This station, the 16th of its kind, promises to cater to the community’s fuel, lubricant and general needs. It embodies Namcor’s strategic ambition of bolstering national petroleum supply assurance, offering customers varied options and contributing significantly to both the local and national economic landscapes.
Currently, Namcor is in the midst of expanding its footprint. Several more stations are under construction, with completion projected by the end of this financial year in March 2024.
Paula Kimm, Acting Executive of Sales & Marketing, reasserted Namcor’s dedication to actualising its national retail vision. “We’re deeply invested in forging mutually- beneficial partnerships with businesses and community members. These collaborations allow us to pinpoint strategic locations, providing customers with a choice and generating value for everyone involved – from the end-consumer to Namcor.”
Their branded service stations are primarily managed by private entrepreneurs. Aspiring retail operators keen on launching these branded stations are encouraged to submit comprehensive business plans. These should outline site specifications, projected revenues and expenses, and vehicle frequency in the proposed region. Additionally, potential partners must possess the necessary capital to operate the retail site seamlessly.