EXPLAINER: Amendments to the Petroleum Act

A central Pillar of the proposed amendments is the establishment of a new Upstream Petroleum Unit in the Office of the President, and the concomitant reassignment of certain regulatory functions from the Ministry of Industries, Mines and Energy, specifically from the petroleum commissioner’s office to this unit. This structural change is driven by the rationale to create a streamlined, empowered and semi-autonomous upstream regulator that can respond efficiently to industry needs, while situating strategic oversight at the highest level of government for better policy coordination. The following explains the governance reasoning behind this move:

1. Separation of policy and regulation

Under the current Petroleum Act, the minister of industries, mines and energy holds extensive powers. Namely, issuing exploration and production licences, approving development and production programmes, and generally supervising petroleum operations through the petroleum commissioner. While this model was workable during decades of modest exploration activity, it has limitations in a scenario of multiple large-scale projects. Ministerial decision-making can be slower due to bureaucratic layers and competing portfolio demands, and it is more exposed to political pressures.

2. Elevation of strategic oversight

Oil and gas development intersects with many national interests such as finance (revenue, sovereign wealth funds), economic planning, industrialisation (local content, petrochemicals), environmental management, and even foreign affairs. By housing the upstream unit in the Presidency, it ensures that the regulator’s actions are aligned with broader national strategies and that any high-level constraints can be resolved swiftly through presidential intervention. Importantly, the Presidency can convene multiple ministries to resolve overlapping issues, for example, expedited environmental permitting or marine zone approvals, that a line ministry might find challenging independently.

3. Enhanced regulatory capacity and focus

The new Upstream Petroleum Unit will be a specialised body dedicated solely to upstream petroleum regulation, comprising the director general, deputy director general, and supporting technical staff. This will allow the recruitment or secondment of experts in geology, engineering, economics, and law who focus full-time on oil and gas oversight. A focused unit can develop deeper expertise, faster processes, and a more service-oriented culture.

4. From petroleum commissioner to deputy director general

The amendment bill specifically transfers all statutory references and duties of the commissioner for petroleum affairs to the deputy director general of the Upstream Petroleum Unit. This means the existing petroleum commissioner position will effectively be replaced by the deputy director general role in the Upstream Petroleum Unit. The deputy director general is expected to be technical but with greater authority and resources, and a clear reporting line to the director general and the president.

5. Institutional positioning and perception

Placing the Upstream Petroleum Unit in the Presidency also sends a strong signal to investors and the public. It demonstrates that the state considers petroleum a strategic sector warranting direct attention at the highest level.

6. Transfer of certain powers from minister to president

The amendment bill’s preamble and clause 1 amendments clearly state that certain powers vested in the minister by the current Petroleum Act will now vest in the president. In particular, Clause 1(a) substitutes “president” for “minister” in sections 63(1), 64, 65, 76A, and 77 of the principal Petroleum Act. These sections of the original act relate to critical areas such as the authority to enter petroleum agreements, make regulations, and manage royalty and fiscal matters. For example, Section 65 of the principal act deals with the payment of royalties and the right to remit or defer them; transferring this to the president ensures those decisions are taken at head of state level.

7. Empowering regulations and incidental matters

When it comes to making regulations, proposed section 76A, will make provisions for the president after consultation with the minister responsible for fisheries and the one responsible for environment to make regulations relating to various aspects of the petroleum industry.

It is important to candidly address the risks and potential consequences if Namibia fails to enact these amendments promptly or if implementation is significantly delayed. In the current global context, investors highly value regulatory certainty, clarity, and efficiency. With multiple high-value petroleum developments on the line, any ambiguity or inertia in Namibia’s institutional framework could deter foreign investors, erode confidence, and ultimately jeopardise the country’s ability to capitalise on its oil discoveries.

*This is an extract of the original article by Shakwa Nyambe, who is is the managing partner at SNC Incorporated.

Read the full explainer at https://miningandenergy.com.na/analysis-and-submission-on-the-proposed-amendments-to-the-petroleum-exploration-and-production-act-no-2-of-1991/

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.