Oil industry must be Namibianised – Utjavari
Several critical reforms in policies and legislation are needed in the oil and gas industry to enable local participation in the sector and reap maximum returns from the country’s resources.
This is according to energy expert Uaapi Utjavari during a recent interview with Nampa, after an information-sharing seminar on Namibia’s oil and gas industry which covered a range of issues, including the ownership of oil, loopholes in the mining sector and structural reforms needed to address shortcomings.
“Our policies should accommodate Namibians to participate in the oil and gas industry so that one day, we can be like the Nigerians and have a full company owned by Namibians, running the [oil] business,” Utjavari said. At present, Namibians’ participation in the industry is at the mercy of operators who have no legal obligation to include locals in their operations.
“Even now, National Petroleum Corporation of Namibia’s (Namcor) percentage is not in the law. Sometimes they get 10%, 7% or 15%. It is not fixed. It depends on how tough they are negotiating. So if we put it in the law, it will be better for us. Namibians and foreign investors must start on an equal footing. Most companies say you [Namibians] can only participate in the production phase. [But] if you only participate in the production phase, how do you learn what happened at the exploration phase?”
The geologist then challenged lawmakers to rise to the occasion on the genuine ownership of the country’s vast natural resources, noting that at least 90% per cent of the workforce in the mining and oil sectors are Namibians.
This, he said, is evidence that the country can run its oil and mining affairs. In a dossier by the Namibia Petroleum Operators Association (NAMPOA) that was presented at the same seminar, its vice-chairperson Bridget Venner seemingly agrees with Utjavari that the government is entitled to receive an unspecified “share of any successful project once production has started”.
Since independence, foreign investors have pumped around N$30 billion into oil exploration activities.
NAMPOA’s view is that the government should steer away from exploring oil itself, as it is “risky” and “costly”. Furthermore, Utjavari poked holes in the mines and energy sector, which sees millions being shipped out of the country, without those companies having declared dividends.
“If you have an agreement that says, you can pay tax if you declare dividends, who is so stupid to declare dividends so that the taxman can come to me?”
To address this, Namibian authorities must tighten their tax collecting and monitoring capabilities to avoid the illicit flow of revenue out of the country.