Namibia's budding oil industry

The Namibia Oil and Gas Conference 2023 has recently concluded, hosted as part of the Economic Association of Namibia’s annual conference and organised by the Namibia Investment Promotion and Development Board and the Hanns Seidel Foundation in Namibia.

The event, supported by the mines and energy ministry of Namibia and with the Namibia Petroleum Corporation (Namcor) as a strategic partner, took place from 16 to 17 August.

The primary objective of the conference was to create a platform for large-scale public consultations, bringing together key stakeholders from industry, experts, policymakers and civil society to discuss and explore opportunities, challenges and advancements in Namibia's oil and gas sector.

It was to foster collaboration, knowledge sharing and investment in the country's emerging oil and gas industry.

The event set itself apart by exploring how the barriers to civil society, academia, students, and local business participation in oil and gas had been significantly removed or lowered. Prime Minister Sara Kuungongelwa-Amadhila and the minister of mines and energy, Tom Alweendo, elaborated on Namibia’s ambitions to become a sustainable energy source for Africa.

Following the recent offshore oil discoveries, this latest conference was the second one held in Windhoek this year.

In April, while opening the fifth Namibia International Energy Conference, Alweendo said that Namibia is likely to be the first country to achieve the United Nations' 'net zero' carbon emissions goal.



Swift developments

Namibia made two oil discoveries along the southern coast last year, a third in March, and in July, Shell announced a fourth. The completion of drilling at the Lesedi-1X well confirmed the presence of hydrocarbons, bringing the total oil discoveries made in the Orange Basin to five in less than two years. The latest discovery follows successful finds made by Shell at the Graff-1X, La Rona, and Jonker-1X wells in 2022 and 2023, as well as by the French-based energy major TotalEnergies at the Venus-1X well.

By 30 June, the chosen drill rig for TotalEnergies had arrived in Namibian waters and immediately began drilling in the deep waters of the Atlantic Ocean. The Deepsea Mira oil rig left Norway in April after being selected in December 2022, following TotalEnergies' discovery of oil at its Venus-1X (PEL 56) borehole in March 2022. A fixed contract was signed for 300 days, with TotalEnergies having two options to extend the period for another 180 days and another 90 days. If both options are used, the rig will still be operating in Namibian waters well into next year.



Work underway

Martin Negonga, the Namcor asset manager, said at the time that TotalEnergies had already completed drilling at the Venus-1A borehole in June, and the valve system was being deployed while fluid properties were also being tested. On 18 June, the Nara-1X (PEL 91) well was also drilled, he said, with its assessment expected in the fourth quarter of this year. TotalEnergies wants to go into production soon, with the expectation of producing the first oil by 2029, he said.

Northern Ocean also supplies Shell in Namibia with the use of the Deepsea Bollsta oil rig, according to Offshore-energy.biz.

This contract has been extended until June 2024. Shell discovered oil in February 2022 at the Graff-1X (PEL 39) borehole and again in February this year at the Jonker-1X (PEL 39) borehole. Shell is approaching the project in phases, with its first oil expected in 2030, Negonga said.

According to him, Shell Namibia deployed Graff-1X's valve system and tested fluid properties in April. In May, it was reported that oil had been hit at Graff-1X and reportedly shot out at drillers "like a train".

Portuguese oil and gas company Galp Energia also chartered the Hercules rig in May to drill two holes in its PEL 83 exploration area. It should arrive in the fourth quarter of this year and has been chartered for 115 days, including travel time, to come and do the drilling.

Negonga says Galp's planned wells are north of the Kudu gas fields and in the same area as the discoveries.



Local involvement and ownership

Namcor owns 10% of Galp's PEL 83 as well as 10% of Shell's Graff 1X, with QatarEnergy and Shell each owning 45%. In terms of TotalEnergies' two exploration blocks, 2912 and 2913B, Namcor owns 15% and 10%, respectively, with Impact Oil and Gas owning 18.89% and 20%, respectively, and QatarEnergy owning 28.33% and 30%.

Negonga's advice to businessmen and local entrepreneurs is to prepare well in advance to participate in the burgeoning oil industry in Namibia.

"Information is worth its weight in gold; learn and sharpen your skills; maximise sustainability and remember that your network is king," he said.

At the April conference, Shell's representative to Namibia, Dennis Zekveld, said they are drilling several more exploration holes.

Alweendo insisted that Namibia is committed to the development and utilisation of all its energy resources. Like the rest of Africa, Namibia is trapped in an energy deficit, which eliminates the immediate rejection of carbon energy sources, he said.

Energy affects the economy and prosperity of all countries, according to Alweendo, and "this is a critical time for the planet's fossil-fuelled economy, which cannot switch to renewable sources as quickly as some would like." He added: "We know climate change is a reality and that Africa is most affected."



Bright outlook

Namibia's energy basket must still embrace all sources as power is needed to develop the economy, he said. "When we do this right, as we intend to do, we will also be able to help others with the transition," he said.

Alweendo has also been in contact with his South African counterpart about cooperation to develop the Kudu gas project. The oil discoveries also involve gas and are close to Kudu, which greatly improves the economic viability of the long-awaited development.

"Just imagine we can combine all this gas – actual gas-to-power becomes much easier," he elaborated. "Sustainable financing must also include sustainably produced fossil fuels," he added.

Furthermore, Alweendo encouraged oil companies to look for more discoveries elsewhere than in the Orange Basin. The minister seeks the involvement of Namibians in the development of energy in Namibia.

"Not the well-connected middlemen, but the true entrepreneurs and the deserving sons and daughters with something to offer," he said. "It will be required of investors to ensure that all services that can be offered locally are obtained here. Where not, local entrepreneurs' capacity must be built. This can only happen if we have real entrepreneurs," he insisted.

"Investors are part of the conversation. Join us," Alweendo said earlier this year.

Mines and energy minister Tom Alweendo insists that Namibians participate in the growing local oil and gas industry by providing goods and services to the major developers. Photo Augetto Graig