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Namibia hailed as Africa’s new exploration frontier…investment, growth and energy supply security in focus

2021-11-11  Staff Reporter

Namibia hailed as Africa’s new exploration frontier…investment, growth and energy supply security in focus
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The opening day of African Energy Week 2021 in Cape Town featured a panel discussion focused on the legal and technical aspects of oil and gas exploration during a Country Spotlight on Namibia. Moderated by Jo Kromber, the Foreign News Editor for Xinhua News Agency, the discussion featured a panel including Namibia’s mines and energy minister Tom Alweendo; CEO for Canadian oil and gas company, Reconnaissance Africa (ReconAfrica), Scott Evans, and the Managing Director for the National Petroleum Corporation of Namibia (Namcor), Immanuel Mulunga. 

At the energy summit, Namibia’s mines and energy ministry noted the promotion of investment and growth, and energy supply security as primary goals in creating a policy and legal framework to attract investment into the sector. Another key focus is maintaining cooperation and competition in the fair distribution of upstream sector activities.

 The Namibian government formally invited international and regional oil and gas companies to submit applications for licenses for petroleum exploration. Legislative frameworks and policies that govern the Namibian upstream oil and gas sectors are well developed and designed specifically for implementation for the international oil industry. Standard international practices, licence application fees, annual licence area rental charges, as well as annual training fees are main elements set out in the fiscal framework legislation for investment in the country’s oil and gas sector.

 Namcor, which is responsible for assisting the ministry with petroleum exploration and production policy administration, is tasked with the acquisition of data, the promotion of Namibia’s petroleum potential, and creating value for all stakeholders.

 “Africa is easily the most underexplored continent in the world,” said ReconAfrica CEO, Scott Evans. He added, “I think there are a lot of opportunities that haven’t had significant attention.”

 About how Namibia’s fiscal deficit and public debt levels will improve with the abundance of oil and gas resources, Alweendo stated, “We are on the cusp of transformative activities that can transform the country.” He added that Namibia has fruitful oil and gas prospects with the potential to deliver equity to the country. During the panel discussion, he noted the current economic projections do not take into account future discoveries made by ReconAfrica.

 The Country Spotlight, which took place on 9 November, established Namibia on the international oil and gas stage. Following favourable fiscal incentives, Namibia positioned itself in the competitive petroleum exploration scene and drew interest from oil majors including Tullow, TotalEnergies, GALP, Shell, ONGC, and ExxonMobil. Namcor has also taken a central position in shaping the country’s prospects, commissioning a 10% interest in multiple international companies operating in Namibia.

Speaking on opportunities in the country, Shakwa Nyambe, Director for the Association of International Petroleum Negotiators indicated the necessity to develop policies that create an enabling environment to attract investors. “Namibia’s energy approach, which is that of an energy mix, promotes all forms of energy. The same national policy promotes the exploration of oil and gas and also promotes the traction of investors,” he stated when questioned on the exploration opportunities that exist for Namibia’s natural resources.

 On the measures and adjustments for rent, royalties, and taxes for exploration companies, Namcor’s Mulunga stated, “The fiscal regime in Namibia is quite simple,” adding that, “The government will want to increase taxes in a progressive, competitive, and transparent manner.”

 ReconAfrica and its joint venture partner, Namcor, recently completed drilling operations on the 6-1 well in the Kavango Basin, its second stratigraphic test well in the country. ReconAfrica currently holds petroleum licenses comprising approximately 8.5 million contiguous acres in the deep Kavango Sedimentary Basin.

 Committed to a just energy transition, ReconAfrica has completed the drilling operation for 16 solar-powered water wells for local communities in the Kavango East and Kavango West regions, aiming to drill six more in the near future. The company has also indicated that it has employed over 300 Namibians for its operations in the country.

 Concluded Paul Eardley, Head of Oil & Gas for Standard Bank, “There are a couple of unique aspects around the African development story. We continue to support and encourage the development policies that consider the climate. It is clear that development returns [in Namibia] are unmatched anywhere else in the world.” 

2021-11-11  Staff Reporter

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