IF THERE is one news story Namibians ought to follow closely, it is the talks between the government and TotalEnergies, which will decide whether the company commits N$279 billion to develop its Venus oil discovery.
This week chief executive Patrick Pouyanné told investors the company could make its final investment decision, the point at which its board formally commits the money, in October, indicating it was “a matter of weeks”.
Last week Jenik Radon, a lawyer and adjunct professor at Columbia University (in the US), said Namibia could gain from delaying the decision to prepare its legal framework. “Given what I’ve heard today and what I know, maybe it should be delayed,” Radon said. Perhaps he has a point.
The question now is what the government is doing to ensure that Namibians benefit from the sector if TotalEnergies decides to proceed.
This is where the National Upstream Petroleum Local Content Policy comes in. The policy, approved in August this year, sets out how Namibians can take part in the industry.
It seeks to ensure “that Namibians actively participate across the petroleum value chain” and that the sector creates lasting value through employment, enterprise development, skills transfer and industrial growth.
It also notes that it “shall be formally launched and widely publicised” through print, broadcast and digital media, and gives the media the job of promoting “public awareness and understanding” of the sector.
The policy notes that as the sector is still developing, local participants may have limited awareness of the opportunities and industry requirements.
It promises a regularly updated database of registered local suppliers, including a list of goods and services reserved for Namibians.
However, Namibians need to want in. The policy only says that qualified Namibian companies become suppliers.
If Namibian companies fail international standards and don’t work to improve, the policy will all but remain on paper.
Guyana should serve as an example.
The small country, which borders Venezuela, Brazil and Suriname in South America, has seen its economy grow sharply since oil production began in 2019.
Its national assembly passed a Local Content Act in December 2021, which, according to Stabroek News, sets minimum levels of local participation in 40 areas – ranging from 5% to 100% – and requires the minister to report to the national assembly on implementation.
The Guyana Chronicle reported that the act also requires a Local Content Secretariat to keep two registers: one of local businesses and one of Guyanese seeking work in the petroleum sector. Namibia’s policy sets no targets and says nothing about reporting to parliament.
Despite those reforms, Guyana still struggled to deal with rampant poverty. Tellingly, a headline in the British newspaper The Guardian noted: “Guyana found huge oil reserves 10 years ago, so why are most people still poor?”
There is no guarantee that local content is the panacea to benefiting from the oil industry. However, it would be progressive for the government to also prioritise access to information.
If people don’t know how the industry works and what the opportunities are, only those few who already have the information and connections will benefit.
This has happened before in the fishing industry and other industries dominated by socalled black economic empowerment deals.
Last year, Institute for Public Policy Research (IPPR) researchers interviewed communities in five regions and found that many people hoped to benefit economically from the sector.
Researchers said one of the sector’s problems is the technical language used to explain oil and gas ventures, which excludes the general public.
The government should initiate a communication strategy and set out its policy promises through the media and in the regions. It needs to explain, in practical terms, what the opportunities are and how Namibians can utilise them.
Namibia should also join the Extractive Industries Transparency Initiative (EITI) to improve transparency in an industry.
Transparency will go a long way towards empowering citizens, as well as businesses, and help them to make the right decisions.
