Govt still eyes Opec membership

Government sees “great value” in Opec and would like to join “at the right time”, Namibia’s petroleum commissioner at the mines and energy ministry, Maggy Shino, has said.

Partaking a webinar on Guyana-Namibia upstream trends, Shino commented on the country’s potential membership of the Organisation of Petroleum Exporting Countries (Opec).

Government sees great value that an organisation like Opec has in managing the dynamics of the market to ensure that the industry strives, she said.

The African Energy Chamber (AEC) partnered with global energy and commodities information provider S&P Global Commodity Insights for the event on Wednesday.

Eager to maintain this exploratory momentum, Shino said that for now, the government has no plans in place to change the current licensing structure in the country, but rather, it is committed to ensuring that the upstream market is “open for investment”.

“We don’t want to force companies to make a decision in a licensing round but want to remain open for investment so that companies come when they are ready,” she said.

Global interest

Following discoveries of possible commercially viable oil offshore Namibia, Shino said the country is seeing heightened interest by global players, owing largely to Namibia’s attractive fiscal and regulatory environment.

She stated that, “as a country, there is a benefit of being a late comer because we have gained insights from other countries on how to maximise our [legislation].”

While other countries continue to face challenges associated with environmental concerns, Namibia’s position as a new market has enabled the country to include environmental provisions in the drafting of its legislation.

This has not only enhanced its attractiveness as an investment destination but ensures the protection of the environment – a top priority for the Southern African country.

According to Shino, “the Environmental Management Act has taken into consideration many scenarios to ensure industry growth as well as environmental sustainability. We continue working with civil society to ensure that our laws improve and will continue to provide the much-needed protection of the environment.”

Consulting

Meanwhile, as a nascent energy market, Namibia has the opportunity to learn from those that went before it.

Historically, resource-rich countries have all witnessed an ‘oil boom,’ a trend in which only the communities directly connected to energy developments reap the rewards.

However, Namibia is committed to turning this trend around, implementing a number of local content mechanisms to enhance value addition and economic prosperity.

According to Shino, the country is turning to its neighbours including Angola, Nigeria, Equatorial Guinea and others to strengthen local content ahead of first oil and gas. The government is also prioritising economic diversification to ensure the development of various segments of the economy, with tourism having been identified as a top industry.

Guyana and Namibia

While the offshore basins of Guyana and Namibia show few geological similarities, the timelines by which exploration efforts were undertaken and major discoveries were made are remarkably similar. Both countries witnessed over 50 years of exploratory efforts which yielded few results.

However, following initial major discoveries, the pace at which developments, as well as associated E&P campaigns, kicked off rapidly accelerated.

According to Joaquim de Azevedo, principal petroleum economist for upstream solutions at S&P Global, the contribution towards gross domestic product (GDP) growth by the oil and gas sector will trigger an increase in wealth and improvement regarding the well-being of the population of both countries.

He said both countries have fiscal terms which are attractive to global investors and are both prioritising the rollout of gas-to-shore facilities to meet local demand using domestic resources.

Reserves

Erik Meyer, senior technical research analyst at S&P Global, said Guyana and Namibia both rank among the world’s top 25 basins by identified reserves.

Guyana leads at 18 billion barrels of discovered hydrocarbons, while Namibia ranks high with its Venus and Graff-1 discoveries.

Meyer emphasised that the discoveries made in the Southern African country has “unlocked Namibia’s deepwater potential, with a number of prospects not yet explored in the Orange Basin. There is a lot of potential in the basin and we could see future large-scale discoveries.”

For Guyana, the country made 30 discoveries offshore, finds which have enabled further exploration as revenue increases.

Similarly, with its three discoveries made to date, Namibia, according to Cody Schulte, senior technical research analyst for upstream at S&P Global, is well positioned to attract a new wave of funding.

He said that both countries are similar in the fact that testing and drilling across ultra-deep waters have been key for players present in Namibia and Guyana. – African Energy Chamber