The government has reassured oil and gas investors that policy uncertainty will not derail the country’s most advanced offshore oil projects.
Speaking at the Namibia Oil and Gas Conference in Windhoek yesterday, mines and energy minister Modestus Amutse called Namibia “a partner that keeps its word”.
These comments come as the industry waits for a final investment decision by TotalEnergies on its Venus oilfield project in offshore Namibia, which was expected last month.
“Certainty: It is the word every investor in this hall listens to. Let me offer this [certainty] in three forms: [institutional certainty, policy certainty and fiscal certainty],” Amutse said.
The new petroleum bill that is currently before parliament moves control over the upstream petroleum sector from the energy ministry to the Office of the Presidency.
Amutse said this move is not a disruption.
“It is a deliberate realignment to protect a sensitive sector, drawn from the experiences of producing countries,” he said.
The state will maintain its regulatory powers and annual reporting to the National Assembly will ensure oversight over decisions made in the unit, he said.
The approval of the upstream petroleum local content policy, announced earlier this month, was meant to provide additional policy certainty for investors.
“The local content policy gives this industry the rules of engagement. It tells you exactly what Namibia expects,” Amutse says.
He adds that Namibia is providing fiscal certainty through a stable and transparent framework, with petroleum revenues managed through long-term tools like the Welwitschia Sovereign Wealth Fund.
“Predictability is our policy. Namibia does not move goalposts. Let me say this directly to our international partners,’ Amutse said.
Head of the Upstream Petroleum Unit Kornelia Shilunga told investors that the government is working on three key areas, balancing the need for policy predictability and the long-term national interests of the country.
“This is not the government versus the industry.
We are working together to create national value while protecting national interest,” Shilunga said.
She said the government is working with operators and investors on major petroleum projects, including the ongoing discussions for the final investment decision on the Venus oil project.
The government is also working on its licensing regime and legislative reform.
Shilunga said Namibia is considering how to strengthen the licensing framework for future exploration, she identifies the three key areas.
It is also going through a comprehensive review of the petroleum legal and fiscal regime.
“We want Namibia to be viewed as a jurisdiction where investors understand rules, where investment can be made with confidence,” Shilunga said.
RMB’s head of oil and gas strategy Angelique Peake told The Namibian that the combination of speeches was intended to reassure the industry.
“They were definitely designed to give investors comfort and confidence.
I do also think that until we reach this final investment decision, which at this point is an agreement between Total and the government, the industry as a whole is still basically in limbo,” Peake says.
Investors are likely to be reassured by the fact that the government is working on major oil projects, despite the fact that the new petroleum bill has not been passed.
“[The speech] does address concerns that there is a delay [to FID] because the bill hasn’t been passed,” she says.
The government will need to balance making the right decisions that will determine Namibia’s future while proving that it can act quickly enough for investors, Peake says.
Economist Almandro Jansen says the statements from the government at the conference were needed.
“I think there was a lot of uncertainty before this conference took place.
The messages from the minister calmed the storms,” Jansen says.
Investors shy away from uncertainty, and Namibia needed to use this opportunity to present itself positively to the global market, he says.
“The government and the investors are reassuring [everyone] that the transition from exploration to development is going to take place.
I definitely think it was a statement that was needed, especially for investors, but also the broader market,” Jansen says.
