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Namibia Looks To Acquire Minority Stakes In Petroleum Companies

The move comes amid surging concerns over the country’s key resources’ local ownership. Namibia is looking to take minority stakes in petroleum production companies, joining nations considering nationalisation of resources, reported Bloomberg News.

A major producer of uranium and diamonds, the country is also considering taking stakes in mining firms and establishing a minerals exploration fund. The move comes amid surging concerns over the country’s key resources’ local ownership. Namibia Mines and Energy Minister Tom Alweendo was quoted by the news agency as saying to lawmakers: “We are making a case that local ownership must start with the state, which holds ownership of our natural resources.

“The proposed state ownership should take the form where the state owns a minimum equity percentage in all mining companies and petroleum production, for which it does not have to pay.” Some of the nations, including Brazil, Chile, Indonesia, Peru, Philippines and
Zimbabwe, are looking to maximise the value of their mineral resources or contemplating enhanced state intervention in their respective mining sectors, partly due to surging commodity prices, reported Bloomberg News. Recently the Minister of Mines and Energy of Namibia, Tom Alweendo, gave feedback on the drafted National Upstream Petroleum Local Content Policy. Notably, the Minister drew a clear distinction between local content and local ownership policies, and called for the inclusion of Namibians in the country’s nascent oil and gas

“Local content is defined as the active participation of Namibians in the oil and gas sector through training, employment and the provision of goods and services. We are drawing a distinction between local content and local ownership,” he stated. Minister Alweendo also underscored the importance of a shared understanding of local content policies among stakeholders, and for rigorous input on the draft legislation. “This platform offers us the opportunity to think about local content policy together. Our oil and gas discoveries have the opportunity to transform our economy beyond taxes and royalties,” said Minister Alweendo. “This will all depend on what we decide today.” Petroleum Commissioner Maggie Shino concluded the minister’s address with the government’s ambitious plans for the sector, noting that the Ministry has issued 37

active upstream licenses, 34 exploration licenses, two reconnaissance licenses and one production license to date. “In terms of the landscape of the Namibian oil industry, there are many dynamics that must be considered. When not properly regulated, it is easy for resourced nations not to see the fruits of their labor,” said Commissioner Shino. “Our geologies confirm that there are still untapped onshore and offshore reservoirs, and we will continue promoting the country’s petroleum potential.” Commissioner Shino also emphasised the long-term impact of the decisions made at the workshop, and the transformative effect that strong local content policy could have on the sector.

“We are designing a document that will serve generations. While we are waiting for royalties and taxes, we must create industries,” she concluded. In March 2023,  Reuters  reported that Namibia’s state-owned oil company NAMCOR and its partners Shell and QatarEnergy made an oil discovery in the Jonker-1X deepwater exploration well in the offshore Orange Basin. NAMCOR managing director Immanuel Mulunga was quoted by the news agency as saying: “We are delighted to announce this third oil discovery after the success of the Graff-1X and Venus-1X discoveries by Shell and Total Energies in 2022.”

Staff Writer

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