By Staff Reporter
WINDHOEK, April 24 — Namibia’s deepwater hydrocarbon resources are attracting significant foreign investment from international oil companies (IOCs), as demonstrated by the recent Jonker-1X light oil discovery in the Orange Basin, made by Shell, QatarEnergy, and the National Petroleum Corporation of Namibia (NAMCOR). This marks the third discovery in a string of exploration successes announced in the past year, including the Graff-1X and Venus-1X finds. These discoveries prove the size and scope of Namibia’s deepwater hydrocarbon resources, which are expected to fuel the growth of the Namibian economy.
The energy and petroleum sector in Namibia is experiencing heightened interest and commitments from IOCs in its frontier basins, with companies such as QatarEnergy holding interests in three Orange Basin Exploration Licenses covering over 28,000 km². A Memorandum of Understanding (MoU) was recently signed between QatarEnergy and Namibia’s Ministry of Energy and Mines to promote continued cooperation between the two countries in knowledge sharing, workforce development, and upstream investments. This MoU represents one of several bilateral agreements forged between Namibia and international partners in the past year, signalling growing partnership and investment opportunities within Namibia’s oil and gas sector.
Foreign direct investment (FDI) flows to Namibia’s hydrocarbons sector have witnessed significant growth, rising to $338 million in Q2 of last year due to an influx of equity capital for exploration activities. Although the mining industry remains Namibia’s largest draw of FDI inflows, the Jonker-1X, Venus-1X, and Graff-1X discoveries reflect rising foreign investment into Namibia’s hydrocarbons sector, which could replace mining as the country’s most attractive industry.
Business-friendly policies will be critical to ensuring development across Namibia’s energy sector, with green hydrogen, solar, and wind projects expected to be funded and actualized through foreign investment secured through hydrocarbons and the reinvestment of earnings by some IOCs into other sectors. To attract new FDI, the Namibian government has implemented policies such as the Namibia Investment Promotion Act (2016) and a series of tax incentives that may be made newly available to additional industries across the energy sector. Existing FDI is governed under the Foreign Investment Act of 1990, which outlines the equal treatment of foreign and domestic firms, expropriation compensation, and steps for international dispute arbitration.
As the latest offshore oil discoveries progress towards large-scale development, Namibia is well-positioned to attract significant FDI flows to its nascent energy sector, triggering growth across its national economy. These developments and others within Namibia’s energy industry and the entire extractive sector will be further explored in the upcoming Energy Invest Namibia report. – Namibia Daily News