Swakopmund — Mines and Energy Minister Tom Alweendo says the discoveries of major oil reserves in Southern Africa will be of importance to Namibia, a country battling a volatile and challenging business environment, characterised by a slowdown in the economy.
He says about 18 exploration wells have been drilled offshore Namibia with no major discovery but which yielded an excellent geological understanding of the country's offshore margin.
Alweendo made the observation during the official opening of the third Namibia international oil and gas conference that is currently underway in Swakopmund.
The two-day conference, held under the theme 'Building partnerships to transform Africa's oil and gas industry', is being attended by the world's key players in the industry. The conference is organised by RichAfrica Consultancy and ends today.
Alweendo told the audience that oil and gas have become an important economic driver on the African continent as many African countries have made discoveries, and that Namibia could also benefit immensely from such discoveries.
"Oil and gas are the world's most important and valuable commodities and constitute a major source of revenue for governments and corporations that control production and distribution. Nigeria and Angola as the leading oil producers in Africa derive the bulk of their revenues from the sale of oil. One can only imagine what such a discovery would mean for Namibia," Alweendo said.
He went on to explain that the 2010 gas discovery by Total in South Africa as well as the Mozambique gas discovery the same year are some of the biggest discoveries in Southern Africa.
"Namibia's own Kudu Gas discovered in 1974 is also worth noting although nobody wants to talk about it," he said.
He added that many countries in the world, including Namibia, are dependent on oil imports and nations with surpluses often exercise disproportionate influence in the world.
"The private sector in Namibia currently controls 100 percent of the imported refined products. Hence the reinstatement of the 50 percent fuel import mandate through Namcor remains a strategic objective of the government," Alweendo explained.
According to the minister, this government objective will be championed by the 75-million litres strategic oil storage facility that was constructed just outside Walvis Bay.
However, he says in order to achieve this, it requires a collective effort from both government and the private sector.
"Through the realisation of the importance of continuous oil and gas exploration activities, government values investment in the oil and gas sector in both upstream and downstream," he explained.
The minister encouraged the private sector to further invest in exploration activities as government is providing a conducive environment by ensuring a stable policy framework.
Alweendo also told delegates that Namibia has one of the most favourable petroleum fiscal regimes and incentives in Africa that encourages equitable sharing of economic benefits when a discovery is made.
Some of its key features, he said, include petroleum income tax, levies, state royalty and negotiable additional profit tax when the internal rate of return is greater than 15 percent.
These, Alweendo said, coupled with the country's attractive petroleum legislation based on international best practices and an approachable government, make Namibia the best place for investments.
He appealed to delegates to share developments and merging trends in the industry which will further galvanise the country to make an immense contribution to the improvement of the sector.