Namibia’s Minister of Mines and Energy emphasized that the government will not change existing contractual provisions pertaining to ongoing oil and gas developments, but will instead retain its current stake through the national oil corporation.
Hon. Tom Alweendo, Namibia’s Minister of Mines and Energy, refuted reports that the government is considering increasing the state’s stake in petroleum production advancements in the country. Speaking at the Invest in African Energy Forum in Paris this week, the Minister clarified that Namibia will maintain its existing stakes in E&P assets, as defined by contracts established and signed with global players, through the national oil company NAMCOR, as defined by the contracts established and signed with global players.
According to sources citing comments made by Minister Alweendo on Monday regarding equity, the government is considering raising its stake in various energy and mining activities taking place in the country, such as those led by energy majors Shell and TotalEnergies in the Orange Basin. During the Paris Forum, however, the minister clarified that his statement was focused on the government using royalties from oil and gas – based on existing contractual stakes – to create a fund for local entrepreneurs to participate in the burgeoning energy and mineral industry.
As a result, the government is not considering increasing its ownership in existing licenses, but rather evaluating the different ways monies produced through oil and gas might be channeled towards the local community, thus improving local engagement and capacity building across the expanding industry.
According to Hon. Alweendo, the Ministry is focusing on local content to ensure that natural resources benefit the local people, and that monies can be allocated towards local communities under the conditions of the existing petroleum licenses in existence. This does not necessitate a change in contractual terms, but rather a strategy for utilizing oil and gas earnings to benefit the country more directly. The Minister intends to rebuild capacity in the country through NAMCOR, using funds raised from current oil and gas stakes.
“We need to make sure investments are mutually beneficial so that African people can see that resources are working for them. When we invest, let us try create more value in-country,” the Minister stated in Paris.
Reiterating what Hon. Alweendo stated, Maggy Shino, Petroleum Commissioner at the Ministry of Mines and Energy, stated that, “We are not changing our regime and our contractual terms. We are committed to ensuring final investments are made.”
The government has a stake in every oil and gas license through the national oil company NAMCOR, which represents the government’s interests and works towards increasing value addition across the Namibian economy. With the country set to witness significant growth across its energy market owing largely to its three sizeable discoveries in 2022 and 2023, the government is prioritizing local content with the aim of scaling up the domestic market, advancing the participation of both local and private players, while funding a new wave of entrepreneurs across the energy sector.
AEW 2023 is the African Energy Chamber’s annual energy event. This year’s edition takes place in Cape Town from October 16-20 under the theme, ‘The African Energy Renaissance: Prioritizing energy poverty, people, the planet, industrialization and free market.’