Namibia’s Oil Exploration future
In quick succession, Namibia has been the recipient of two oil finds in the southwest of the country’s coastal waters. Both these finds are considered to be substa-ntial, especially in light of Namibia’s clear desire to become an oil producing nation. Acting under the Petroleum (Exploration and Production) Act of 1991, the National Petroleum Corporation of Namibia – (NAMCOR) has a mandate to carry our reconnaissance, exploration and production operations.
Added to this is the clear intention of the country’s leadership with an official visit of the Namibian President, His Excellency, H. G. Geingob to the Gulf State of Qatar. President Geingob met His Highness, the Amir of State of Qatar, Sheikh Tamim bin Hamad Al Thani for official talks.
During the session, the two sides discussed bilateral relations between the two countries and the aspects of developing them in various fields, especially in the field of investment and energy. They also discussed a number of issues of common concern which most likely included the oil find, capacity building and of course oil trading do’s and don’ts.
Courtesy of the Namibian state-owned oil company, the National Petroleum Corporation of Namibia – (NAMCOR), RDJ Briefing has been reliably informed on the following facts related to the recent discoveries:
The Graff-1 well has proved a working petroleum system for light oil in the Orange Basin, offshore Namibia, 270 km from the town of Oranjemund. Drilling operations commenced in early December 2021 and were safely completed in early February 2022. This block has a Joint Venture group comprising NAMCOR, Shell Namibia Upstream B.V and Qatar Energy,
The Venus-1X discovery is located approximately 290 kilometres off the coast of Namibia, in the deep-water offshore exploration block. The well was drilled to a total depth of 6,296 metres, by the Maersk Voyager drillship, and encountered a high-quality, light oil-bearing sandstone reservoir of Lower Cretaceous age. This block, Block 2913B (PEL 56) comprises of a Joint Venture group that includes TotalEnergies (40%), QatarEnergy (30%), Impact Oil and gas (20%), and NAMCOR (10%).
This then brings the real question. Will Namibia benefit?
The IMF in its analysis of oil production on oil producing nations found that the volatility of oil prices brings around major challenges. One of the challenges for the Namibian government will be looking at how the 10% stake it has in both wells/finds can be materialized to not only meet economic demands locally but the “great expectations” of the public. IMF research/data shows that historically, oil has a volatility that can be unpredictable.
Such as oil prices plunging to around US$12 per barrel in late 1998, surging to US$30 per barrel in late 2000 to fall back to US$20 per barrel in early 2002. This volatility can translate into significant fluctuations in fiscal revenue. Further, as oil is a non-renewable resource, then over reliance on its revenue should be avoided. Lessons have been clearly learnt from the fishing and mining industries on both spectrums – jobs and revenue/taxes.
Having said that, it is also important that “hybrid” energy use or an effective energy mix be maintained. This speaks also to the move to alternative fuels and technologies that Namibia and Southern Africa by extension move to urgently as it “weans” of fossil fuels.
As always, the conversation continues email@example.com
https://www.qatar-tribune.com/news-details/id/230309/amirnamibian-president-discuss-ways-to-boost-ties https://www.namcor.com.na/media https://www.imf.org/external/pubs/nft/2003/fispol/