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Home / Oil companies spent N$30 billion since 1990…in search of commercially viable hydrocarbons

Oil companies spent N$30 billion since 1990…in search of commercially viable hydrocarbons

2022-03-28  Maihapa Ndjavera

Oil companies spent N$30 billion since 1990…in search of commercially viable hydrocarbons

Vice chairperson of Namibia Petroleum Operators Association (NAMPOA) Bridget Venner last week stated that over N$30 billion has been spent in the country by foreign investors since independence.

About N$4 billion has been spent in the past six years alone in the search for the ever-elusive black gold. 

NAMPOA is an association of oil companies operating in Namibia and functions as an interface between the industry, government and society at large.

“Post-independence through the year 2020, there were 21 wells drilled with no commercial discovery. Companies have invested billions of dollars in exploration activities, but there has been no commercial discovery since independence,” she said while addressing an information workshop on the Namibian oil and gas industry.

Venner stated in 2021, there has been a significant increase in exploration interests, both offshore and onshore. She added that there are currently 32 exploration licences (20 operators), three reconnaissance licences, and one production licence in the country.

However, the chairperson believes recent activity highlights the potential for commercial oil and gas developments. Thus far, the Kudu Gas field is the only hydrocarbon discovery in Namibia with plans underway for a gas to power development. Both Shell and Total recently announced oil discoveries and for this appraisal, activities are ongoing to determine commercial viability. In the meanwhile, ReconAfrica is continuing with its exploration activities in the northeast of the country.

Commenting on Namibia fiscal prospects, Venner explained that under Namibian petroleum agreements (PAs) the government is entitled to receive a share of any successful project once production has started. The PA stipulate a range of 55% to 66% for government take, including the National Petroleum Corporation of Namibia’s (Namcor) share.

“A large offshore oil development could result in billions in income for the Namibian government over the production life of the field. But government policies are key to achieving this success,” Venner emphasised.

At the same event, Aune Amutenya, a chief geoscientist at the mines and energy ministry, shared the same sentiments in her presentation, saying favourable economic and fiscal policies are perfect for attracting investment. In this regard, she stated any successful oil and gas industry development will greatly benefit Namibia.

“The development of oil and gas will increase the State’s income through rights rentals, payment of taxes and royalties, creation of employment opportunities through short- and long-term contracts, export revenue, and energy security,” Amutenya noted.

2022-03-28  Maihapa Ndjavera

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