WINDHOEK, Mar. 17 – Minister of Mines and Energy Tom Alweendo on Wednesday insisted that the discovery of oil in Namibia should be a blessing and not be allowed to be a curse as has happened in many a country.
“We know of countries where the discovery of oil became a curse and there are also countries where the discovery became a blessing. I would like to believe that we all want our discovery to be a blessing rather than a curse. However, for it to be a blessing hinges mostly on our policy environment, especially our institutional and political aspects of it. It has been proven that countries with strong institutions, a stable political system and an effective legal framework were able to manage their oil revenue with a positive impact on the economy and for the benefits of their citizens. I have reason to believe that our institutions, our political system, and our legal framework are such that there is no reason why the oil discovery should not be a blessing,” he said.
Alweendo added that it was great economic news for Namibia, especially after various attempts over the years to discover oil, adding that while the discovery was good news, it did not necessarily translate to the instant production of crude oil
“While the discovery is good news for all of us, we need to understand that we will not have a production of crude oil tomorrow. We need to be aware that more analytical work needs to be done before the construction of the platforms to extract the oil commences. We therefore need to exercise a bit of patience, provided of course that our patience should not prevent us from doing what needs to be done in preparation of when the production commences.”
He called for sustainable management of resources that would benefit future generations.
“What we need to do, however, is to manage the resources with a clear understanding that the resources belong to both the current and future generations. Necessarily therefore the management of the resources must benefit both generations. The recent establishment of the sovereign wealth fund, the Welwitschia, is a clear move in the right direction.”
“At the beginning of this year a barrel of crude oil cost US$78, and today it cost US$110 – an increase of 41%. The real fact is that a discovery in itself will not necessarily lead to cheaper local fuel price. This will depend on a number of factors, such as the costs to extract the crude and the cost to refine it. In our case, given the fact that this will be deep water extraction, the extraction cost is likely to be much higher than in some other jurisdictions.” – musa@namibiadailynews.info
