4 March 2013

Namibia Wants Angolan Oil

NAMIBIA wants a hand in the construction of Angolan oil refineries, while also considering buying crude oil from its northern oil-rich neighbour.

These were some of the issues addressed at a recent meeting between the two countries' energy authorities in the Angolan capital, Luanda. The two delegations were led by Namibia's Mines and Energy Minister Isak Katali, and the Angolan minister of petroleum, Jose de Vasconcelos.

The four-day meeting focused on oil refining, cooperation on crude oil supply, the construction of a storage terminal and negotiations on a memorandum of understanding.

Both parties recognised the experience and expertise of Angola in the field of oil refining, hence the need to strengthen cooperation in this field.

The Namibian delegation expressed interest in participating in the second phase of the construction of the Lobito and Soyo refineries. In order to facilitate this, De Vasconcelos encouraged close cooperation between the national oil companies, namely Sociedade Nacional de Combustíveis de Angola (Sonangol) and National Petroleum Corporation of Namibia (Namcor).

As part of Namibia's interest in buying oil from Angola, Katali also expressed interest in the sectors of refining crude oil, liquified natural gas and the construction of storage infrastructure.

According to Katali, the private sector has full control over the Namibian downstream monopoly, but the Namibian government is creating "workable mechanisms to change the situation".

Last year, the chairman of Namcor, Johannes !Gawaxab, said although there was room for the private sector to have a share in Namibia's petroleum sector, the Namibian government would be ill-advised to leave the supply of petroleum products in the private sector's hands entirely.

"That [privatisation] will be committing strategic suicide," !Gawaxab said.

As for a storage terminal, Angolans were invited to participate in the tender for the construction of a 70-million-litre petroleum storage facility in Walvis Bay.

Namibia currently uses about 900 million litres of fuel a year and only about 86 million litres can currently be stored in the country at a time, with most of the storage being in Walvis Bay. Namibia's fuel consumption is increasing by about 2,5% a year.

The construction of this terminal will take between two and three years to complete. The new facility will bring the total fuel storage in Namibia to 156 million litres.

It is hoped that an agreement between the two countries would be signed this year still.

Angola produces and exports more petroleum than any other nation in sub-Saharan Africa, surpassing Nigeria. In January 2007 Angola became a member of OPEC. Oil sales make up 80% of the government's budget. The country is the third-largest trading partner of the United States in sub-Saharan Africa, largely because of its petroleum exports. The US imports 7% of its oil from Angola.

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