Oil companies: Get locals on board, or leave
Government has laid down working with Namibian companies and government as a prerequisite for international oil and gas companies hoping to exploit natural resources in the country.
The inclusion of local partners and the incorporation of local skills would not simply be a choice, but an obligation, petroleum commissioner Maggy Shino said this week.
She reiterated this stance at the International Association of Drilling Contractors conference currently underway in Windhoek.
Government is pursuing this strategy to increase local participation in the value chain, create employment and ensure the training and development of Namibian citizens, while ensuring equity participation for Namibians at all levels of the petroleum sector, she said.
Inclusive participation
“Local content is a must, not an option that is 'good to have' in the Namibian petroleum industry. As an enabler for economic growth, we are looking for inclusive participation that goes beyond just employment. We are looking for local content that is visible in industrialisation, capacity-building and through skills and technology transferred,” Shino said.
As part of the strategy, a company will be considered local if it is incorporated under the laws of Namibia with at least 51% of its equity held by citizens, and whose principal place of business is in Namibia. In assessing the level of compliance with the local participation requirement, specific care will be taken to mitigate and guard against the practice of fronting, she explained.
This means oil majors Shell, TotalEnergies and Galp - who discovered the Graff-1, Venus 1-X and Energia Mopane 1-X oil wells respectively - will be required to walk the talk on local content creation with government.
Prospects of bigger yields
Namibia’s prospects of becoming a major oil and gas destination seem positive, Shino said.
“Looking at the data analysis, the prospectivity and the untapped potential of the Namibian basin is huge, with everything having been bigger and better than we anticipated thus far. Currently, there are four drilling rigs offshore Namibia in our prolific Orange Basin conducting both exploration and appraisal drilling campaigns operated by Shell, Total and Galp,” she said.
The potential for more oil finds is ever-increasing, with data showing that other major oil discoveries are poised in the Lüderitz and Namibe basins, she noted.
Oil and gas prospects were initially announced in 2022.
“With current reprocessing and interpretations of existing data that are ongoing, the potential for Namibia is not only confined to the Orange Basin, but extend throughout the Lüderitz, Walvis Bay and Namibe basins,” Shino said.
Government is also looking forward to further decisions by TotalEnergies, Shell and Galp in light of their discoveries, she added.
“It is our hope that within the upcoming months, final investment decisions will be made on the discoveries that have made by TotalEnergies, Shell and Galp, and the existing Kudu Gas field operated by BW Energies.”
The inclusion of local partners and the incorporation of local skills would not simply be a choice, but an obligation, petroleum commissioner Maggy Shino said this week.
She reiterated this stance at the International Association of Drilling Contractors conference currently underway in Windhoek.
Government is pursuing this strategy to increase local participation in the value chain, create employment and ensure the training and development of Namibian citizens, while ensuring equity participation for Namibians at all levels of the petroleum sector, she said.
Inclusive participation
“Local content is a must, not an option that is 'good to have' in the Namibian petroleum industry. As an enabler for economic growth, we are looking for inclusive participation that goes beyond just employment. We are looking for local content that is visible in industrialisation, capacity-building and through skills and technology transferred,” Shino said.
As part of the strategy, a company will be considered local if it is incorporated under the laws of Namibia with at least 51% of its equity held by citizens, and whose principal place of business is in Namibia. In assessing the level of compliance with the local participation requirement, specific care will be taken to mitigate and guard against the practice of fronting, she explained.
This means oil majors Shell, TotalEnergies and Galp - who discovered the Graff-1, Venus 1-X and Energia Mopane 1-X oil wells respectively - will be required to walk the talk on local content creation with government.
Prospects of bigger yields
Namibia’s prospects of becoming a major oil and gas destination seem positive, Shino said.
“Looking at the data analysis, the prospectivity and the untapped potential of the Namibian basin is huge, with everything having been bigger and better than we anticipated thus far. Currently, there are four drilling rigs offshore Namibia in our prolific Orange Basin conducting both exploration and appraisal drilling campaigns operated by Shell, Total and Galp,” she said.
The potential for more oil finds is ever-increasing, with data showing that other major oil discoveries are poised in the Lüderitz and Namibe basins, she noted.
Oil and gas prospects were initially announced in 2022.
“With current reprocessing and interpretations of existing data that are ongoing, the potential for Namibia is not only confined to the Orange Basin, but extend throughout the Lüderitz, Walvis Bay and Namibe basins,” Shino said.
Government is also looking forward to further decisions by TotalEnergies, Shell and Galp in light of their discoveries, she added.
“It is our hope that within the upcoming months, final investment decisions will be made on the discoveries that have made by TotalEnergies, Shell and Galp, and the existing Kudu Gas field operated by BW Energies.”
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