Dr. Klaus Endresen, Chairman of the Namibia Petroleum Operators Association, speaks with Energy Capital & Power about interfacing between industry, government and the public following Namibia’s offshore discoveries.
How does NAMPOA facilitate collaboration among its members, as well as between the public and private sector?
It’s quite clear that knowledge about our industry is very limited. We started a couple of years ago with bilateral meetings on a one-to-one basis with key players in the government sector to provide them with the fundamentals of our industry. Without their understanding, we can’t establish meaningful cooperation. We are also expanding our information material and are currently planning various campaigns for 2024 to brief government officials and the public. Once we make progress with these efforts, it will be easier for all parties to engage in concrete discussions on the development of the sector. We maintain close collaboration with NAMCOR, as well as the Directorate of Petroleum Affairs in the Ministry of Mines and Energy. It’s through these partnerships that coordination and the accumulation of joint knowledge occur. There are currently numerous exploration activities taking place and these ongoing efforts indicate that there will be a substantial amount of new data available for the Orange Basin.
Is NAMPOA involved in the formulation of local content policies related to the upstream sector?
NAMPOA encourages its members to take a proactive approach towards the development of local content policies being formulated by the government. We received the draft policies in November 2022, and after internal discussions, provided constructive feedback to the government. By demonstrating a genuine commitment to being a responsible corporate citizen, both the country and companies benefit.
What challenges does Namibia face in developing its hydrocarbon resources?
The biggest challenge is the lack of knowledge regarding the intricacies of the oil and gas sector. While the actions taken within the industry may seem obvious to those already involved, those without prior experience in oil and gas lack a true understanding of our objectives in exploration, the associated probabilities, cost levels, pricing considerations and the entire process from inception to production. When people gain insight into the risks involved and the substantial investments required, they are often astonished. In a country like Namibia where the oil and gas sector is relatively new, it becomes crucial to establish realistic expectations. There is a prevalent misconception that oil is coming tomorrow. While mature appraisal programs are currently underway, their outcomes remain uncertain.
Secondly, the country has been polarized as a result of many years of being subject to apartheid in South Africa, which has resulted in a skewed distribution of economic wealth in Namibia. The imbalanced distribution of resources, including capital, appropriate training, backgrounds and other necessary resources, continue to pose a significant challenge.
What is the potential for Namibia to become a regional energy exporter?
Namibia is strategically placed as an energy hub in southern Africa. We have an abundance of sun and wind, and we have proven oil and gas. The combination of these resources makes Namibia an attractive destination for meeting growing demand for electricity. That being said, the approach to estimating future electricity capacity requirements based solely on projected GDP growth is fundamentally flawed. Namibia possesses significant potential for adding more value within its current mining sector. The reason why a substantial amount of ore is exported without undergoing refinement is due to the lack of available, reliable and affordable energy in the country – mainly electricity, but also gas. By enhancing the energy supply, the demand for various forms of energy will increase. This demand will not only be locally generated demand, but might also result in the relocation of economic activities from other parts of the Southern African Customs Union to Namibia. With well-functioning harbors, robust infrastructure and participation in the Customs Union, it’s not difficult to imagine the potential sources of these relocated activities. This represents a tremendous upside for Namibia.
Source: energycapitalpower.com