Govt is not looking at changing existing contractual terms regarding ongoing oil and gas developments says Alweendo
The Minister of Mines and Energy Hon. Tom Alweendo debunked statements that the government is looking at raising the state’s interests in petroleum production developments in the country.
Speaking during the Invest in African Energy Forum in Paris this week, Alweendo clarified that Namibia will maintain its existing stakes in E&P assets, as defined by the contracts established and signed with global players, through the national oil company NAMCOR.
Citing comments Minister Alweendo made regarding equity on Monday, reports state that the government is looking at increasing its stake in various energy and mining developments taking place in the country, such as those led by energy majors Shell and TotalEnergies in the Orange Basin.
However, during the Paris Forum, the minister clarified that his statement was centered on the government using royalties from oil and gas, according to existing contractual stakes, to create a fund for local entrepreneurs to enable them to participate in the burgeoning energy and mineral industry.
As such, the government is not considering raising its stake in existing licenses, but is assessing the various ways funds raised through oil and gas can be redirected towards the local community, therefore advancing local participation and capacity building across the growing industry.
According to Alweendo, to make sure that the natural resources benefit the local people, the Ministry is focusing on local content, and according to the existing petroleum licenses in place, as per the terms negotiated, funds can be directed towards local communities.
This does not require a change in contractual terms, but rather, a strategy by which oil and gas revenue can benefit the country on a more direct basis. Using capital raised from existing stakes in oil and gas, the Minister, through NAMCOR, aims to build capacity back into the country.
“We need to make sure investments are mutually beneficial so that African people can see that resources are working for them. When we invest, let us try to create more value in-country,” he said.
Reiterating what Hon. Alweendo stated, Maggy Shino, Petroleum Commissioner at the Ministry of Mines and Energy, stated, “We are not changing our regime and our contractual terms. We are committed to ensuring final investments are made.”
The government has a stake in every oil and gas license through the national oil company NAMCOR, which represents the government’s interests and works towards increasing value addition across the Namibian economy.
With the country set to witness significant growth across its energy market owing largely to its three sizeable discoveries in 2022 and 2023, the government is prioritizing local content to scale up the domestic market, advancing the participation of both local and private players, while funding a new wave of entrepreneurs across the energy sector.