Government urged to develop market-friendly policy content
Ensure value addition can take place, govt told
The government has been urged to create a responsive local content policy that is not too restrictive for oil companies.
Government has been urged to develop a local content policy (LCP) for oil and gas that is amenable and responsive to the needs of international oil companies (IOCs) to ensure that sufficient value addition can take place in Namibia.
This follows the discovery of oil resources in the Orange Basin off the southern coast of Namibia by oil majors Shell, Total and Galp over the course of the last two years.
Government has now set out to create a LCP to ensure that the benefits accrued benefit all Namibians.
Speaking at a First National Bank (FNB) engagement this week, ENS Namibia senior associate Stefanie Busch implored the government to set up a LCP that is not too restrictive but rather encourages real value addition.
“If the LCP is too strict and the requirements too fast, there will be time delays because what can be driven by the IOCs cannot be actioned by the IOCs because there won’t be Namibians to do the work,” Busch said around efforts to empower Namibians to do technical work that may be required by IOCs but for which Namibians are neither fully skilled nor qualified to carry out.
Unnecessary costs
Busch also warned against unwarranted situations that could arise where middlemen charge exorbitant amounts for providing goods and services, saying real value addition should occur and not the payment of unnecessary commissions to middlemen.
“You might also see intermediation without value, this middleman syndrome where you just have a Namibian company that is procuring from elsewhere, adding 30%, 40% top up, and just selling onwards, that is not bringing any value,” she warned.
“Is there enough capacity to monitor and enforce the LCP? Because we all know there are laws and policies, but if they are not enforced, what can you actually do about it?” she added.
The government, in driving the LCP, said it intends to ensure a pathway for the full participation of all Namibians in the petroleum sector.
This follows the discovery of oil resources in the Orange Basin off the southern coast of Namibia by oil majors Shell, Total and Galp over the course of the last two years.
Government has now set out to create a LCP to ensure that the benefits accrued benefit all Namibians.
Speaking at a First National Bank (FNB) engagement this week, ENS Namibia senior associate Stefanie Busch implored the government to set up a LCP that is not too restrictive but rather encourages real value addition.
“If the LCP is too strict and the requirements too fast, there will be time delays because what can be driven by the IOCs cannot be actioned by the IOCs because there won’t be Namibians to do the work,” Busch said around efforts to empower Namibians to do technical work that may be required by IOCs but for which Namibians are neither fully skilled nor qualified to carry out.
Unnecessary costs
Busch also warned against unwarranted situations that could arise where middlemen charge exorbitant amounts for providing goods and services, saying real value addition should occur and not the payment of unnecessary commissions to middlemen.
“You might also see intermediation without value, this middleman syndrome where you just have a Namibian company that is procuring from elsewhere, adding 30%, 40% top up, and just selling onwards, that is not bringing any value,” she warned.
“Is there enough capacity to monitor and enforce the LCP? Because we all know there are laws and policies, but if they are not enforced, what can you actually do about it?” she added.
The government, in driving the LCP, said it intends to ensure a pathway for the full participation of all Namibians in the petroleum sector.
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