Play-opening Orange basin discoveries to boost Namibia’s economy with local content policy ahead of first production

April 02, 2024

(WO) – Namibia’s Ministry of Mines and Energy has placed local content at the heart of the country’s oil and gas agenda and is currently formulating a local content policy (LCP) to ensure the participation and inclusion of Namibians ahead of future production.

Source: Energy Capital & Power

A draft policy was published by the Ministry last November, while a cumulative process to develop a comprehensive policy for the upstream petroleum industry has been initiated with stakeholders within the sector. Meanwhile, Namibia’s Green Hydrogen and Derivatives Strategy Report – published in November 2022 – showcases the potential of the country’s emerging green hydrogen industry to create up to 80,000 jobs, while contributing up to $6 billion to GDP.

Local content development on the back of major discoveries. A series of commercial discoveries in the offshore Orange basin has positioned Namibia as one of the most sought-after exploration markets globally.

Last month, French supermajor TotalEnergies intersected hydrocarbon-bearing intervals at its Mangetti-1X exploration well, while Portuguese energy company Galp announced two consecutive oil discoveries at the Mapone complex in the first months of this year. This follows four commercial discoveries by supermajor Shell in 2022 and 2023, as well as the Venus-1X discovery by TotalEnergies in 2022.

These discoveries have the potential to create thousands of jobs and contribute billions to the country’s GDP, with some estimating that Namibia’s economy could double by 2040.

As a result, regulatory bodies, such as the Namibian Competition Commission, are advocating for mandatory investment in local content development as a condition for license awards and acquisition approvals.

Effective LCPs serve as a key catalyst for growing the role of national companies and service providers across the sector, with nascent energy sectors like Namibia’s standing to gain valuable insight from existing African producers.

Namibia is also prioritizing local capacity building ahead of first production, with the soon-to-be-launched Namibia Offshore Training Center offering comprehensive training in exploration, petroleum engineering and geoscience and representing the first facility of its kind in the country. Meanwhile, a cooperation agreement signed between national oil company NAMCOR and QatarEnergy in March 2022 provides a framework for the training and development of NAMCOR employees in industry skills.

“Having worked in our country’s energy sector for years, local content is important for Namibia and for the in-country value creation that will give our young people and entrepreneurs jobs, business opportunities and much-needed capacity building. The government’s pragmatic and common sense approach works for both citizens and industry, which continues to create a win-win platform,” says Selma Shimutwikeni, CEO of RichAfrica Consultancy.

“The active participation and development of Namibian labor and suppliers before first oil is key. The benefits coming from the huge capital expenditures in appraisal and development activities on labor, goods and services will benefit Namibia’s industry, economy and wider society, and this panel speaks to that interplay.”

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