By: Justicia Shipena
The Managing Director of the National Petroleum Corporation of Namibia (Namcor) Immanuel Mulunga says Namibia needs to hurry to get its oil out of the ground as soon as possible.
Namcor in partnership with Shell and QatarEnergy this week announced another light oil discovery in the Jonker-1X deep-water exploration well.
The well was drilled in the Orange Basin, offshore southern Namibia.
The drilling operations commenced in December 2022 and were completed in this month.
This is the third oil discovery in Namibia since February 2022.
Mulunga said the oil does not help anyone if it is in the ground. So we need to take it out of the ground as quickly as possible especially considering the energy transition taking place.
He emphasised that oil and gas will lose relevance as time goes by.
“It is important for Namibia to as quickly as possible to produce the oil out of the ground, so that Namibia can benefit economically from the resources,” he stressed.
However, the Namcor chief welcomed the recent announcement on the light oil discovery, adding that there is a need for support from the Namibian public in the country’s efforts to finalise further exploration in the ongoing drilling.
“This is welcome news for the country. It is bringing us closer and closer to knowing how much Namibia has and when it can start with development and production efforts. Hopefully, in five or six years from now, we can actually start producing oil.”
He said the recent discovery is a continuation of the drilling activities after the discoveries made last year in February.
The recent discovery follows two similar announcements by QatarEnergy in February 2022 of oil discoveries in the Graff-1 well and in the Venus-1X prospect, both located in the Orange Basin offshore Namibia.
Meanwhile, Shell already made an oil discovery on its acreage in the Orange Basin in Namibia, following the drilling of the Graff-1 deepwater well in Block 2913A. The well was drilled using the Valaris DS-10 drillship and announced as a discovery in February 2022.
Mulunga explained that in oil and gas, once one makes a discovery, one needs to do further exploration to find out the extent of the discovery made.
“So this is a continuation of that exercise we are continuing to drill more wells. I am sure by the end of this year after another four wells or so we will have a pretty good idea of how much oil and gas we have in that license,” he said.
Asked about Namibia’s stake in this discovery, Mulunga said Namcor has a 10% while stressing that it is not the only stake Namibia will have.
“Namibia as a country, will benefit from royalties and petroleum income tax and because the government owns Namcor it also benefits from that 10% of Namcor,” he adds.
Once all is added together, he stated, Namibia will walk away with between 65% to 67% of the cake of the entire oil production.
“Namibia is well poised to become a major oil producer in Africa in the next few years,” he concluded.
At Qatar Economic Forum 2022, Namcor’s Board Chairperson Jennifer Comalie, said in an interview that the oil and gas discoveries in Namibia could double Namibia’s GDP by 2040.
The Minister of Mines and Energy minister Tom Alweendo said despite the energy transition Namibia will still be able to monetise the oil as the energy transition is not going to happen tomorrow.
“The transition is there but it is not that suddenly there will be no oil to be used in the next 30 or 40 years. I am confident that we will still be able to monetise the oil and get value out of it,” said the energy minister.
“We need to fast-track our processes to make sure that we don’t take too long to make sure this oil is being produced. With regards to the energy transition, I don’t think it should be much of a big concern because for the next 30 to 40 years people will still need oil,” he explained.
Commenting on the offshore discovery announced this week, Alweendo stated that it is positive for Namibia and for people to see that Namibia can be an oil-producing country.
He said the question would be asked what would this discovery, in the end, mean for the economy, indicating that it is not so much about the revenue that Namibia will receive as a country, but it should also mean the local content. Local content is the value that the extraction of oil brings to the local economy beyond the resource revenue.
In this light, he said it is vital for Namibian entrepreneurs to rise and not wait until the last minute. “They must engage with what is happening so that they are in a better position to provide the services that are needed for the oil industry,” Alweendo urged.
