National Petroleum Corporation of Namibia (NAMCOR) Managing Director Obeth Mbui Kandjoze, warns that oil wealth characteristically produces less economic development than it should and encouraged all role players especially Government to take measures before oil is found in Namibia.
“Not only is the industry about rewards and significant return on investment but it is also infamously known for what is termed as the oil curse, which relates back to the upheaval of the 1970s, when oil prices soared and governments across the developing world seized control of their countries’ oil industries,” he says.
Kandjoze was addressing oil and gas specialists, Government officials and public members at a one day seminar to impart knowledge on the basics of oil and gas industry to any interested party in the capital recently.
“Before nationalisation, the perception today is that the oil-rich countries were much like the rest of the world. However, today they are possibly ruled by autocrats and are probably inclined into civil war than would be the case of countries not having oil,” he adds.
Kandjoze states that it produces employment in many parts of the world more for men than it does for women.
It also produces problems in underprivileged countries in comparison to the rich and developed nations of the world.
He also cautions that the worldwide desire for petroleum is causing companies to drill in increasingly poor nations.
“I urge that the Government through NAMCOR and all the players in this industry work to ensure that this phenomenon does not hit our shores and that we should be an exemplary nation of what can go right,” he says.
He adds that appropriate governance framework from the myriad of lessons available globally and particularly specific to the African continent, ‘should be adopted as early as now in order to help without delay the implementation of such best practices and robust regulations and laws so as to ensure that this industry benefits all Namibians’.
The oil and gas seminar was hosted by NAMCOR and Serica Energy Plc together with the Ministry of Mines and Energy.
Kandjoze further says the recent HRT oil find has been a hot topical issue which demonstrates the high expectation from the many exploration programmes going on in this country.
“The question is ‘what does this non-commercial find really mean for Namibia as a country?’ It simply means that Namibia being classified as a gas prone province only over many years, will now be a thing of the past with the recent oil find by HRT, effectively laying down the gauntlet for the race to find those commercial volumes of liquid hydrocarbon on the Namibian margin,” he notes.
He says it further confirms that the source rocks in offshore Namibia are rich in organic matter, which is mature for oil.
This find, therefore, is a piece of very good news to the industry and the country.
He further says that the oil prone source rock proved by Wingat well has encouraged many companies operating in Namibia to drill, as this has reduced the risk of oil exploration in Namibia.
“Government need investment capital, technology and knowledge transfer, as well as the development of the necessary specialist human capital to anticipate future discoveries coupled with a robust regulatory management framework, while Oil & Gas Investors need access to reserves, access to exploration acreage in their search for the next project on our offshore and onshore margins,” he emphasises.
He also argues that Government needs to prepare and readies itself for increased exploration activities and possible economic oil and gas discovery.
“Although the pioneering oil and gas legal and fiscal framework in place over the last 23 years have been the backbone of the significant activities and oil find in recent weeks, the governance framework will need to be reviewed to cater for recent developments in the industry and new practices to bring it in line with today’s people, planet and profit considerations as a measure of public accountability enshrined in the King III Corporate Governance Report,” he states.
Other oil specialists and NAMCOR officials also made presentations on aspects such drilling and completions, logging and petro-physics, reservoir engineering, petroleum economics as well as health, safety and environmental issues.