• Saturday, May 25, 2024
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Nigeria’s loss is Namibia’s gain as oil majors flock to southern African country

Nigeria’s loss is Namibia’s gain as oil majors flock to southern African country

Namibia is emerging as a new frontier for oil exploration, with international oil companies (IOCs) increasingly looking south as Africa’s biggest oil producer struggles to attract investments into its energy sector.

With a population of about three million people, Namibia, which has yet to produce any oil or gas, has become an exploration hotspot after offshore discoveries by TotalEnergies and Shell and wants to accelerate the milestone of the country’s first output.

There’s a “big chunk of oil” in waters off Namibia, said Patrick Pouyanne, chief executive officer of TotalEnergies SE, which alongside several other companies has made significant discoveries in the African country.

“Shell has some oil, we have some oil, Galp has some oil,” Pouyanne said in an interview at the French company’s headquarters near Paris on Wednesday. A scenario “like you have today in Guyana is very possible.”

Read also: Our people, land facing extinction due to oil exploration – Ogoni group leader

In the past two years, TotalEnergies, Shell Plc and Galp Energia SGPS SA have made finds off the southwest coast of Africa that turned sparsely populated Namibia into a hotspot for exploration. While no field has yet been given the green light for development, hopes are high in the country that an economic boom similar to that seen in Guyana could be on the cards.

The Latin American nation became the world’s fastest-growing economy after Exxon Mobil Corp. tapped large offshore discoveries there. Earlier this month, the U.S. company formally approved its sixth oil development in Guyana, which will one day make it a bigger crude producer than its neighbour and founding OPEC member Venezuela.

Pouyanne cautioned that it might be more complex to optimize several projects led by various operators in Namibia, rather than the single company Exxon that’s leading development in Guyana.

By the end of next year, TotalEnergies aims to approve its first oil development in Namibia at the Venus discovery, which could involve a floating production, storage and offtake vessel with a capacity of as much as 180,000 bpd, Pouyanne said.

Read also: Global oil exploration investments to hit $528bn in 2023 – IEA

The company will continue to explore its blocks before considering whether it might need more production vessels, and can take heart that Shell seems to have made another find in an adjacent area, he said.

Officials from Namibia’s Ministry of Mines and Energy and state oil company Namcor visited Guyana late last year seeking advice about oil developments, including the participation of local business, raising public awareness and expanding port facilities.

With vast oil reserves, Nigeria is punching below its weight. Oil is the lifeblood of Africa’s biggest economy. It provides roughly half of government revenues and nearly all of its foreign exchange receipts as well as a big part of its presence on the global stage.

But it has also been underutilised as a resource for Nigeria’s 200m people in the 64 years due to bureaucratic bottlenecks, contracting delays, and low local participation since Royal Dutch Shell first tapped a well in the swamps of the Niger Delta.