Overlooked by independent oil companies (IOCs) and considered as an oil and gas frontier state, Namibia is establishing itself more prominently on the international oil and gas map
The Wingat-1 discovery by HRT in 2013, which encountered rich oil-bearing source rocks in the Walvis Basin, was the start of this change and, in the years since, the country has become a much more attractive proposition for oil exploration.
Coupled with favourable fiscal incentives, Namibia has drawn a wealth of oil majors including Tullow, Total, GALP, Shell, ONGC and ExxonMobil.
A coming industry boom is anticipated
Namibia’s competitive petroleum exploration scene has helped the state-owned National Petroleum Corporation of Namibia (NAMCOR) to take a stand in shaping the country’s prospects. With a 10% interest in multiple international companies operating in the country, NAMCOR is ready to help Namibia become one of the leading petroleum-producing countries on the continent.
Tom Alweendo, minister of mines and energy, commented, “We anticipate discussing these developments with our stakeholders at Africa Oil Week in Dubai in November, with who has confirmed his presence.
“Having the event in Dubai in 2021 offers a new opportunity to engage with Middle East investors and operators; we understand that hosting the event in Dubai this year is a sensible and defensible decision, given the current COVID-19 pandemic,” added Alweedo.
ReconAfrica has drilled two stratigraphic test wells in the Namibian petroleum licence area to date, both of which have revealed evidence of a working conventional petroleum system.
The current drilling campaign by ReconAfrica has enhanced understanding of the hydrocarbon potential onshore northern Namibia and the company plans to drill additional wells to determine if this sedimentary basin will yield a commercially viable petroleum accumulation.
Scot Evans, CEO of ReconAfrica, explained, “We look forward to working with NAMCOR as we jointly endeavour to unlock the potential of Namibia’s vast national resources – providing jobs, economic growth and long-term responsible resource development, which includes significant contributions to the social and environmental aspirations of the country.”
Environmental activists are concerned that the move to drill for oil in the Kavango East and West Region will disrupt biodiversity and ecosystems, as well as potentially contaminate water supplies in an area that often suffers from drought. Local indigenous populations have also criticised the move, saying that they have yet to be properly consulted.
While ReconAfrica and NAMCOR’s collaboration serves as a good example of the clamour to invest in the Namibian oil and gas sector before its scale is understood, all possible risks need to be mitigated.
All parties, together with the Namibian government, must find a sustainable balance between the needs of the oil and gas industry, and the needs of the country’s people, in order to realise the full potential of attracting investment in this area.