Namibia to Wait Longer for Oil Finds

THE oil and gas industry was a sector that would require a lot of patience until a discovery was made, according to Minister of Mines and Energy, Isak Katali.

Speaking at the two-day International Oil amp Gas Conference organised in Windhoek by local company Rich Africa Consultancy, Katali said, “While exploration companies have not succeeded discovering oil in commercial quantities, Government is not disheartened because we know it takes patience.”

Namibia has in the meantime run out of exploration blocks “There are no more prospective exploration blocks in Namibia’s offshore areas available,” the Minister said Thursday. “Those companies occupying the existing exploration blocks must do their work properly and find oil,” he added.

The conference was held under the theme ‘Unlocking amp Optimising Our Resource Potential.’

Topics discussed ranged from exploration updates to taxation, required legal frameworks for the oil and gas sector, local content, energy supply and project finance to technology.

Namibia has four offshore basins, Namibe, Walvis, Luumlderitz and Orange. The two onshore basins are the Owambo and Nama basins.

The Kudu gas field was discovered in the Orange basin, while Brazilian company HRT so far made the first and only oil find at the Wingat-1 well in the Walvis basin in 2013. The oil find was of non-commercial volumes. The only well off the Namibian coast drilled this year was by Spain’s biggest oil and gas company, Repsol SA. It was found dry and was abandoned.

Immanuel Mulunga, Petroleum Commissioner in the Ministry of Mines and Energy told the conference exploration companies plan to drill three offshore wells next year.

“The existence of working petroleum systems, exciting structures and amplitude anomalies, improve the chances of a discovery of new oil and gas fields in Namibia possibly in the short to medium term,” Mulunga told delegates.

The state-owned entity NamCor currently had carried interests in 36 of 46 licences issued, he added.

COEXISTENCE

Technical consultant Sindila Mwiya, who spoke on overlaps of exploration with other sectors like fishing, tourism and conservation in Namibia, said rights holders were legitimate users of the offshore and onshore environment. They could co-exist by sharing information and displaying transparency.

“There is an urgent need for the creation of an industry or government-driven common organisational body in Namibia to coordinate issues of coexistence particularly for the offshore environment where challenges exist,” said Mwiya. “In this way, platforms for consultation and knowledge sharing with other users could be created to determine priority areas and identify potential overlapping conflict areas.” He recommended that common research databases should be built as well as working relationships and partnerships.

LEGISLATION

Legal expert Leon Moller noted that the oil and gas sector was regulated by several laws, which vested all rights in relation to petroleum to the State through the Ministry of Mines and Energy. State-owned company NamCor (Namibia Petroleum Corporation) is tasked to participate in the oil and gas industry on behalf of government. “NamCor as the technical aiser to the Ministry provides regulatory support to the Petroleum Commissioner in the Ministry,” said Moller. Once they strike oil or gas, exploration companies were also obliged to provide decommissioning plans to be approved by the minister. Decommissioning is an important aspect in a production cycle since it involves removal of installations, equipment, pipelines and other facilities.

The petroleum legislation also provides for a Decommissioning Fund, which has not been established yet.

CAPACITY

Since the oil and gas sector will bring new industries to Namibia, local content with regard to procurement and local employment creation is regarded as a necessity. To build skills capacity, government established the Petroleum Training and Education Fund, (Petrofund) in 1993. It is anchored in the Petroleum Act (1991). Oil and gas companies are obliged by their exploration licence agreements to contribute to the Petrofund.

According to Nillian Mulemi, CEO of the Petrofund, 70% of the agreed training sum is paid to the Petrofund, while 30% is retained by the company to conduct in-house training and attachments. “Of this 30%, any unspent funds should be paid to the Petrofund,”

Mulemi pointed out. “By the end of 2013, some 221 graduates have benefited from the Fund’s scholarship programme. Currently, 50 students are on this programme.”

The Petrofund pledged N$1,3 million to the geology department of the University of Namibia (Unam) to acquire necessary equipment to roll out a Master’s Degree course in Petroleum Geology next year.

Furthermore, the Fund’s board of trustees established a Centre for Oil and Gas (COG) in May this year. It is housed in the Namibia Energy Institute (NEI). “A technical committee was commissioned to draft the scope of work for the COG,” said Mulemi. This would include research and development, professional development for oil and gas experts and facilitation of regulatory compliance and support.

“We would like to see the industry creating smart partnerships with government to provide holistic solutions in the petroleum sector so that Namibia will have adequately trained professionals and a proper support system in the event of a major hydrocarbon discovery,” Mulemi told the conference.

The Namibia International Oil and gas Conference is the brainchild of Selma Shimutwikeni, founder and managing director of the local company Rich Africa Consultancy. It was held the first time in 2012 and – like this year – was accompanied by an exhibition of companies involved in the sector.

“With this conference, our ultimate goal is to ensure that this platform contributes to the establishment of solid foundations for the management and sustainable development of Namibia’s petroleum and energy sectors,” Shimutwikeni said. The conference will be held every two years.

Source : The Namibian

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