Guest Contributor | Feb 20, 2024 | 0
We are calling for an energy transition that is just and equitable among nations says Alweendo
The Namibia Oil and Gas Conference 2023 started this week in Windhoek with a keynote address by Hon Tom Alweendo, the Minister of Mines and Energy, who highlighted several critical issues that he believes will be addressed at the conference.
The conference brought together key stakeholders from the industry, policymakers, and civil society to discuss and explore opportunities, challenges, benefits, and pitfalls of the local oil and gas industry.
Alweendo in his statement said some of the issues include: 1. the recent oil and gas discoveries that are not a “remedy” for all of our socioeconomic problems; 2. the role of governance in the management of the upstream oil and gas sector; 3. the need to prioritize the development of our local capacity to manage the industry; and 4. the impact of the energy transformation on our oil and gas industry.
The minister remarked that the first issue is that the oil and gas discoveries in commercial quantities have raised the government’s expectations for significant revenue flow and employment opportunities for Namibians.
“Indeed, the discoveries have the potential to significantly improve our socioeconomic challenges. However, the development of an oil sector is inherently associated with uncertainties and complexities,” he noted, citing uncertainties in quantity, quality, production rate, and oil price.
He added that they must also be aware of the sociopolitical and economic difficulties that might occur as a result of oil discovery and subsequent production.
“While significant oil investments are expected to flow into Namibia, it is not a given that prosperity will follow. Only if the investments and consequent oil revenue are carefully managed will prosperity follow. If not well managed, the subsequent result might be worsening socioeconomic issues.”
He stressed that poor management of the oil and gas sector can drive corruption and inequality that in turn will fuel social tensions and threaten political stability. “We thus need to learn lessons from some oil-producing nations whose oil production has not resulted in broad-based socio-economic development. The duty is on us, especially those of us who are entrusted with the public responsibility to manage the sector, to ensure that the sector is managed in the best interest of the country—for the benefit of not only the current generation but, importantly, for the generations to come,” he said,
The second issue he addressed was the need for oil and gas industry governance to ensure that potential economic benefits are distributed equitably and fairly.
“Good governance entails that we should have clear national goals, we ensure sustainable exploitation, we have transparent processes, and we ensure accountability in decision-making and performance. However, apart from good governance processes, to effectively manage our oil and gas resources, the custodians of these resources must possess the required skills, and above all, they must have a high level of integrity,” he stated.
He added: “The third issue is how to meaningfully benefit from the oil and gas sector. To maximize the socio-economic benefits to be derived from this nascent sector, there is an urgent need for us to prioritize the development of our local capability to manage the sector. We need to invest time and resources to understand and upskill ourselves to be effective participants and managers of the sectors. Without the prerequisite skills and capabilities, we will not reap the full potential economic benefits of our oil and gas resources.”
“In the development of the local capabilities, we urge the international oil companies to be active participants. We will not achieve the requisite local capabilities without the effective and serious participation of international oil companies. Not long ago, the Ministry of Mines and Energy organized a workshop to discuss issues related to the Local Content Policy in the sector.”
The minister further said that they define local content as the active participation of the Namibian workforce and entrepreneurs in the upstream oil and gas sector through training, employment, and local procurement of goods and services. “Local content will facilitate economic diversification, deepen backward and forward linkages from various segments of the oil and gas sector value chain, thereby fast-tracking our industrialization,” he said.
Moreover, he affirmed that the fourth issue is about the impact of the energy transition on how our upstream petroleum sector will develop. The oil discoveries are made at the time when the energy transition discussion has reached its crescendo, he explained.
Meanwhile, Alweendo noted that they have observed cases where countries with fossil fuel resources, especially developing countries like ours, are being discouraged not to leverage their fossil fuel energy resources in the name of climate change.
“We are being urged to, as soon as possible, switch to clean renewable energy sources such as solar and wind. I am not taking issue with the fact that we are severely affected by the effects of climate change, because we are all affected.”
However, he underscored that what he finds unreasonable is when some countries and global interest groups demand that the energy transition takes place “in a linear fashion,” completely disregarding the livelihood of those affected.
“This kind of mindset is so condescending, and it shows a total lack of concern about the immense socio-economic development challenges faced by developing countries like Namibia. We are therefore calling for an energy transition that is just and equitable among nations.”
He concluded: “However, recognizing the inevitability of the energy transition, we understand and accept that fossil fuel may no longer be the fuel of the future and that the world is transitioning to renewable energy. Together with international oil companies, we must ensure that our oil sector is being developed with the lowest carbon emissions from its inception. This will be the most effective way to ensure that our oil sector is competitive in the global markets.”