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Namibia eyeing OPEC membership once giant oil finds come online

Highlights

Huge discoveries in Venus, Graff and Jonker wildcats

"New Guyana" keen to exploit African energy demand

Petroleum commissioner clarifies fiscal terms

  • Author
  • Charlie Mitchell
  • Editor
  • Manish Parashar
  • Commodity
  • Electric Power Natural Gas Oil

Namibia plans to join the OPEC "family" if exploitation of its giant offshore oil and gas discoveries goes as planned, turning the Southern African country into a significant oil producer, its petroleum commissioner said June 27.

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Speaking at an S&P Global Commodity Insights webinar, Maggy Shino said Namibia sees "the great value that an organization as OPEC has created in ensuring that the dynamics of the market are controlled and managed in a sustainable manner."

"Because of the potential ... definitely once Namibia has come to such as position where we have established a resource base it is our hope even without knowing the exact numbers that we would be able to join the organization," she added. "It is a family we would be happy to join."

OPEC's sub-Saharan African contingent, which include Angola, Nigeria, Equatorial Guinea, Gabon and the Republic of Congo, say membership gives them greater visibility to investors and international oil companies.

Enormous discoveries

Namibia is on course to join the ranks of Africa's oil producing countries following a trio of enormous discoveries in the red-hot Orange Basin by IOCs, including Shell and TotalEnergies.

The finds -- which are of commercial quantities, likely in the billions of barrels, according to Namibia -- have seen the country dubbed the "new Guyana."

Shino said there were currently a record three rigs drilling exploratory wells offshore Namibia and a ramp-up of seismic acquisitions, adding that two more wells will be drilled in the Orange Basin by the end of 2023. "We hope that by the end of the year we are going to have some serious confirmation of some very aggressive drilling campaigns for 2024," Shino said.

TotalEnergies is spending half its 2023 exploration budget in the Orange Basin, where it discovered light oil with associated gas as part of the Venus prospect that could be one of six super-giants ever found in Africa, experts say. Shell made large discoveries in its Graff and Jonker plays.

While African oil often finds customers in Europe and Asia, Shino said Namibia was also keen to exploit regional demand. Southern Africa is in the throes of an energy crisis, with Africa's most industrialized economy South Africa facing rolling power outages. In total, 650 million Africans lack access to electricity.

"We want to be able to export to the international market to get into those export earnings," she said, "[but] we have a very large market in Africa to be able to consume those resources."

Shino also sought to clarify Namibia's fiscal terms, a month after the country's oil minister sparked confusion in the market by seeming to suggest Namibia would take stakes in foreign companies exploiting its oil reserves. Tom Alweendo later said his comments had been misrepresented.

FEATURE: Namibia seeks to pacify booming oil sector after fiscal terms confusion

"Government take is ranging from 60% to 65% [including state-owned Namcor's share, taxes and royalties] and we think that is a balanced approach for us to still remain attractive to investment and also be able to give a fair and equitable share to the Namibian nation," Shino said. "Our belief is not to change the fiscal terms so much ... We want to drive building the economy based on what the industry can offer today."

The government will mandate that Namibian goods and services should be used in building its hydrocarbons industry, she added, to ensure that the sector is "able to grow the economy and ensure that the Namibian people participate meaningfully."

Finally, Shino said the country will put in place environmental protections, which are already enshrined in the constitution, adding that an environmental focus is an "anchor" for Namibia's petroleum development.