Namibia rallies to move beyond oil discovery hype

Namibia is moving to overhaul its oil and gas laws and regulatory framework as government seeks to ensure the country is institutionally and economically prepared to turn major offshore discoveries into a producing petroleum industry.

The reforms come amid growing pressure to translate years of exploration success into actual economic development, with Vice President Lucia Witbooi warning that Namibia must move beyond excitement over its oil discoveries and put the structures needed to manage the emerging industry in place.

“Our task is therefore to move from resource optimism to disciplined execution,” Witbooi told the Namibia Oil and Gas Conference in Windhoek yesterday.

The proposed changes include a review of the petroleum legal and fiscal regime, the licensing framework and the way future exploration blocks will be allocated. The recently approved National Upstream Petroleum Local Content Policy is also expected to be incorporated into legislation.

Special Advisor and Head of the Upstream Petroleum Unit in the Presidency, Kornelia Shilunga, said the reforms were necessary because Namibia's petroleum sector was moving into a fundamentally different phase, characterised by the scale of recent discoveries and the complexity of potential developments.

“As our petroleum sector develops, our legislative framework must evolve with it,” she said.

The government is assessing whether existing laws remain adequate for an industry transitioning from exploration to potential commercial production, while seeking to maintain investor confidence and protect the national interest.

The licensing framework is also under review, including how Namibia will manage and allocate future exploration acreage. The country has operated an open licensing system since 1999 after moving away from licensing rounds during a period of weak international oil prices.

Economic Association of Namibia chairperson Jason Kasuto said the local content policy was expected to move from policy into legislation, creating stronger requirements for Namibian employment, local suppliers, skills and technology transfer, participation and financing across the petroleum value chain.

Witbooi said the reforms formed part of a much broader preparation for petroleum production, with the Sixth National Development Plan envisaging domestic oil production by 2030.

She said Namibia's challenge was to ensure that petroleum did not become an enclave industry operating separately from the rest of the economy.

“Petroleum must not become an enclave industry operating alongside the Namibian economy. It must become a catalyst for diversification, industrialisation and enterprise development,” she said.

This means government must simultaneously prepare the legal, fiscal, regulatory, infrastructure, skills and economic systems required to ensure that oil production generates wider benefits for the country.

The urgency is underscored by the progress of TotalEnergies' Venus discovery, Namibia's most advanced offshore development. Government and the operator are engaged in discussions towards a final investment decision, with publicly stated plans envisaging an FPSO producing about 150 000 barrels of oil equivalent per day and first oil targeted around 2030, subject to approvals.

Shilunga said government's work was therefore no longer limited to attracting exploration investment, but increasingly focused on creating the conditions for major discoveries to become commercially viable projects.

Witbooi said Namibia had to strike a balance between moving projects towards development and maintaining environmental, fiscal and regulatory safeguards.

“We must demonstrate that Namibia can be both investment-friendly and institutionally firm; both commercially competitive and protective of the public interest,” she said.