Namibia does have an established oil and gas industry. Over the last four years, Namibia has made significant strides in oil and gas exploration activities. The recent offshore discoveries by Total Energies, Shell and Galp Energia in the Orange Basin have placed Namibia in the limelight, with major international and medium-sized oil companies as well as oilfield service companies showing an increased interest to invest in Namibia.

It is crucial to note that to date Namibia has yet to produce a single drop of oil commercially. Moreover, Namibia does not have precise knowledge of its actual oil reserves, as companies like Shell, Galp Energia, and Total Energies are still in the process of completing appraisals to determine the amount and scale of the oil reserves from their discoveries.

The only commercial discovery to date in Namibia is the Kudu Gas Field, which was discovered in 1974 by a joint venture, comprising Chevron Oil, Regent Petroleum and SOEKOR (Pty) Ltd. It has been reported that TotalEnergies seems likely to be the first off the block, with a Final Investment Decision (FID) expected for Venus in 2025, which will require further drilling of subsea wells to be tied back to an FPSO.

The Namibian Government holds the exclusive ownership and exploitation rights of petroleum resources. The Minister, representing the Government, can grant/issue exploitation rights to applicants under the terms of the Petroleum (Exploration and Production) Act No 2 of 1991 (“the Petroleum Act”).

A petroleum exploration licence grants the holder specific rights to explore, or produce oil, both onshore and off­shore in Namibia, as the case may be. Next, the authors look at the types of licences that are issued in terms of the Petroleum Act:

• Reconnaissance Licence;
• A Reconnaissance Licence allows its holder to carry on reconnaissance operations. Reconnaissance operations are defined as the carrying out of operations for or in connection with the search for petroleum through geological, geophysical, and photo-geological surveys, and they include remote-sensing techniques in the block(s). This licence has an initial term of 2 years and may typically be renewed for a period not exceeding two years at a time. It may only be renewed twice.
• Exploration Licence;
• An Exploration Licence allows its holder to carry on exclusive exploration operations in the block(s), for which the licence has been approved. “Exploration operations” are any operations or activities carried out for or in con­nection with the exploration for petroleum, and may include geological, geophysical, geochemi­cal and other surveys, as well as drilling to deter­mine the presence and feasibility of petroleum production. An exploration licence is valid for an initial maximum period of four years (initial exploration period). An exploration licence shall be valid for such further period, not exceeding two years (renewal periods), as may be deter­mined by the Minister at the time of the renewal. An exploration licence may not be renewed on more than two occasions, however, the Minis­ter may, if he or she deems it in the interest of the development of the petroleum resources of Namibia, determine that any exploration licence may be renewed on a third occasion for such period not exceeding two years.
• Production Licence;
• A Production Licence authorises its holder to exclusively carry out production operations on the block(s), in respect of which consent was obtained, and to sell or dispose of petroleum recovered within such block(s), subject to the terms provided under the Petroleum Act. A pro­duction licence has an initial term of 25 years and may be renewed only once for ten years. A production licence may not be renewed on more than one occasion. The maximum duration of a production licence is therefore 35 years.

The principal regulatory body for the upstream oil & gas industry is the Direc­torate of Petroleum Affairs within the Ministry of Mines of and Energy. The Minister of Mines and Energy heads the Ministry and is vested with powers to issue and award reconnaissance, exploration and production licences. The Minister appoints the Petroleum Commissioner and Chief Inspector who are supported by designated public officials. The Ministry of Environment, Forestry and Tourism, which issues environmen­tal clearance certificates, is likewise an integral regulatory body.

The Petroleum Act and Environmental Management Act applies to both onshore and offshore activities. However, it is important to note that onshore exploration normally creates a sce­nario where there is a clash of rights, especially as it pertains to surface and land rights and therefore attracts additional regulatory requirements.

The Petroleum Act makes provision for the establishment of the Ancillary Rights Com­mission. The Petroleum Ancillary Rights Com­mission addresses disputes between licence holders and landowners.

It is also important to understand the land tenure system of Namibia for onshore activities. Land ten­ure in Namibia was – and continues – to be characterized by two broad tenure systems. About 44% of the land area is owned under registered freehold titles and is commonly referred to as Agricultural Land. Another 41% consists of land that is administered under various custom­ary governance systems where use rights to land are allocated to persons typically for life and is commonly referred to as Communal Land. In addition to the land title falling under the Agri­cultural Land and Communal Land, there is also land within local authority commonly referred to as Urban Land (township) which falls under the purview of the local government, which consists of villages, towns, and municipalities. Additional municipal and by-laws also find applicability. Lastly, there is also land falling within Protected Areas which consist of national parks, conservancies, game reserves, nature reserves and community forests. Thus, various complex applications need to be made in Namibia to conduct exploration operations onshore Namibia. The authors have facilitated various applications to conduct onshore operations and drafted and negotiated various land lease/surface use agreements with landowners for various oil & gas and renewable energy projects.

An applicant for a petroleum licence must enter into Petroleum Agreement with the Government. The model form petroleum agreement, with necessary modifications resulting from negotiations between the inter-ministerial Gov­ernment Negotiation Team (GNT) and the appli­cant, must be executed before an exploration or production licence is issued. Once executed, the Licensee is referred to as the Company in the Petroleum Agreement. The Model Form Petroleum Agreement  is currently being peer reviewed and additional key futures may be introduced and/or removed once the peer review is finalised. Below is a summary of the key features in the current  Model Petroleum Agreement operational in Namibia:

a) Work Obligations

Minimum Work Program: The Petroleum Agreement requires the Company to undertake a minimum work program by specifying the exploration operations which Company intends to undertake for the duration of the licence and any renewals thereof. An example of the minimum work programme normally agreed to include acquisition of seismic data and drilling of exploration and/or stratigraphic wells.

Investment Commitments: The Company must commit to investing in exploration activities and must propose a minimum expenditure for the minimum work programme.

b) Environmental and Social Compliance

Environmental Impact Assessments (EIAs): The Company must conduct EIAs and comply with environmental regulations to minimize the impact of exploration activities on the environment. This includes obtaining necessary permits and approvals, i.e. Environmental Clearance Certificate.

Social Responsibility: The Company is required to engage with local communities, salient stakeholders and address social impacts, and ensure that their operations contribute positively to the local economy.

c) Financial and Performance Guarantees

Financial Security: The Company may be required to provide financial security or bank guarantees to ensure that they meet their exploration commitments.

Contribution to Training Fund: During each year of the Exploration Licence or any renewal thereof, the Company shall spend an agreed sum for the purpose of the training and education of Namibians. The annual training fee is subject to negotiation between the applicant and the Inter-Ministerial Government Negotiating Team.

d) Domestic Supply Obligations

Holders of production licences may be required, at the Minister’s choice, to sell Crude Oil in Namibia to satisfy Namibia’s domestic market requirements on a pro rata basis with other producers in Namibia according to the quantity of Crude Oil produced by each producer.

e) Regulatory Compliance

Adherence to Laws: The Company must comply with all relevant national laws, regulations, and industry standards related to exploration activities.

Government Oversight: The Ministry of Mines and Energy, as the competent authority, has oversight authority to ensure that exploration activities are conducted in accordance with the licence terms and applicable laws.

f) Relinquishment

The Petroleum Act requires the holder of an exploration licence to relinquish a portion of the licence area. The Petrole­um Agreement may provide for a relinquishment on any other basis provided for in the Petroleum Act, depending obviously on what was agreed between the licence holder and the government during the negotiations of the Petroleum Agree­ment.

g) Arbitration

Should the Minister and the Company be unable to resolve a dispute through negotiation, either party has the option to refer the matter to arbitration for a definitive resolution. Any dis­pute that remains unresolved will be conclusively resolved by arbitration in accordance with the Arbitration Rules of the UN Commission on International Trade Law, effective on the date the agreement was executed. Unless otherwise agreed by the parties, the arbitration will typically be conducted in London, England.

h) Transfer and Assignment

Approval Requirements: Any transfer or assignment typically requires governmental approval to ensure that the new licensee meets all the regulatory and financial criteria.

These key features ensure that petroleum exploration in Namibia is conducted in a structured and regulated manner, balancing the interests of both the government and the licence holder.

No, Namibia currently does not have any unconventional hydrocarbon resources (such as shale gas) being exploited.

The Namibian upstream oil and gas industry is regulated by the Petroleum Act 2 of 1991, which is administered by the Minister of Mines and Energy. The Ministry of Mines and Energy’s Directorate of Petroleum Affairs through the Petroleum Commissioner, who is appointed by the Minister, regulates the oil and gas sector. In addition, environmental matters are regulated by the Ministry of Environment, Forestry and Tourism through the office of the Environmental Commissioner.  See further answers to Question 2 above for detailed explanation on regulators.

Yes – the Petroleum Act makes provision for the establishment of a National Oil Company – The National Petroleum Corporation of Namibia (Pty) Ltd (Namcor) – which functions as the government’s commercial arm in relation to the oil and gas sector. Namcor is wholly owned by the Government of the Republic of Namibia. Its function, when required by the Minister, is to carry out reconnaissance operations, exploration operations and production operations whether on its own or jointly with any other person or organization in the industry. Namcor seeks to maintain a technical advisory role to the Ministry of Mines and Energy and is tasked with advising the Ministry of Mines and Energy on policy issues regarding the upstream petroleum industry.

Namcor has various subsidiaries, notably, NAMCOR Exploration and Production (Pty) Ltd, which is primarily involved in the exploration and production of Namcor’s upstream assets. Namcor’s functions are prescribed in Section 8 of the Petroleum Act. At this stage, Section 8 of the Petroleum Act does not oblige Namcor to have a mandatory participating interest in any licence. However, in practice, Namcor receives a 10% participating interest upon the granting of an exploration licence.

Namibia has had an Open-Door Licensing Sys­tem since 1999. Under this system, oil and gas exploration and production rights are, upon application, awarded following negotiations between the government of the Republic of Namibia and interested investors, through unso­licited expression of interest. In terms of the National Energy Policy 2017, one of the policy goals is for the Government to promote the country’s exploration potential and attract local and foreign investment in the sector.

As previously noted, the Petroleum Act does not oblige Namcor to have a participating interest in any licence. However, in practice, Namcor receives a 10% participating interest upon the granting of an exploration licence. When applying for petro­leum exploration licence, it is advisable to make provision for carried interest of a local company.

In addition, there are specific local content requirements within the sector. This much is evident in the Petroleum (Exploitation & Production) Act 2 of 1991 as well as the operational Namibian Model Petroleum Agreement. The relevant provisions and clauses make it mandatory for licence hold­ers to comply with local content provisions. Furthermore, by extension, contractors/ service providers are also bound by the local content provisions.

The Min­istry of Mines and Energy is presently finalising a comprehensive local content policy to max­imise the benefits to be gained from petroleum and other industries. The Ministry of Mines and Energy has circulated a draft National Upstream Petroleum Local Content Policy formulated in 2021, with the mission:

��… to maximize the benefits to Namibian citizens from petroleum resources through the enhance­ment and development of strategies that will target phased participation of Namibian com­panies, labour, goods and services, along the value chain.”

We therefore foresee, in the new future, that participation requirements will be included in legislation and regulations.

The primary legal instrument applicable is the Environmental Management Act 7 of 2007 which is one of the principal pieces of legislation that regulates upstream oil and gas activities from an environmental perspective. This Act requires companies to assess and manage the environmental impacts of their activities. It requires the operators to apply and be issued with an environmental clearance certificate (ECC) before they are authorized to commence with any exploration and or production operations. To obtain an ECC, operators are required to conduct EIAs. The EIA process involves public consultation to ensure that stakeholders and, where relevant, local communities are kept informed and are made aware of the activities.  Similarly, operators must develop and implement Environmental Management Plans (EMPs) to address environmental risks identified in the EIA.

Another integral applicable legal instrument is the Labour Act No. 11 of 2007, which governs occupational health and safety across all sectors, including oil and gas. It outlines employers’ responsibilities to ensure a safe working environment. This may include continuous risk assessments where employers are required to conduct risk assessments to identify and mitigate hazards associated with oil and gas operations, the provision of safety training for employees, including emergency response training, and regular health checks for employees exposed to hazardous conditions or substances. The labour regulations further require compliance with safety standards for equipment, machinery, and work practices, as well as the provision and use of PPE to protect workers from physical and chemical hazards. These regulations are administered by the Ministry of Labour. They require, inter alia, a health and safety representative to be appointed.

In addition to the above, the Regulations relating to the health, safety and welfare of persons employed, and protection of other persons, property, the environment and natural resources, in, at or in the vicinity of exploration and production areas No 190 of 1999 (1999 Regulations) regulates health and safety in respect of exploration and production activities. The regulations place a duty on the operator to ensure that good oilfield practices are in place when it comes to health and safety. The 1999 regulations are administered by the Ministry of Mines and Energy and are binding on all licence-holders. There are Health, Safety and Environmental Inspectors from the Ministry of Mines and Energy that are empowered to inspect and ensure that regulations and policies are adhered to by Operators.

The government derives most of its value from its oil and gas resources through taxes. The tax regime for oil and gas activities is regulated through the Petroleum Taxation Act of 1991. The Petroleum Taxation Act and the Petroleum Act provides for the levying and collection of petroleum income tax and additional profits tax in respect of certain income received in connection with exploration operations, development operations or production operations carried out in relation to petroleum.

A) Royalties

Prior to the Amendment Act 24 of 1998 the holder of a production licence had to pay 12½ per cent royalty on the market value of petroleum produced and saved in the production area during each quarter. However, after the enactment of the Amendment Act 24 of 1998 (after 4 September 1998) the royalty payable is 5% on the market value of petroleum produced and saved in the production area during each quarter.

B) Taxable Income

Petroleum income tax is set at 35%. Each licensed area is evaluated independently, prohibiting the offsetting of losses from one area against profits from another.

Additional Profit Tax (APT)

An incremental three tiered APT is charged on the after-tax net cash flow from petroleum operations in each License Area separately.

C) Annual Licence Area Rental Charge

Annual rental fee is calculated by multiplying the km² of the block(s) to which the licence relates, by a N$ 60.00 for the Initial Exploration Period and N$ 1500 for Production Licence. The rental fee varies for the renewal period.

D) Annual Training Fee

The annual training fee is subject to negotiation between the applicant and the Inter-Ministerial Government Negotiating Team.

E) Other Applicable Tax Laws

Additional tax laws relevant to the oil industry include:

• The Income Tax Act 24 of 1981, as amended, imposes a 10% withholding tax on payments made by residents to non-residents for management, consulting, technical, administrative, and entertainment services, subject to any double-taxation agreements. Payment for services rendered by foreign directors and foreign entertainment fees attract a withholding tax rate of 25%. The normal income tax rate of 31% effective 01 January 2024 applies to service companies.
• The Value Added Tax Act 10 of 2000, which currently rates VAT at 15% (transaction may qualify for zero rated supply if specific prescriptive requirements are met).
• The Stamp Duties Act 15 of 1993, which mandates the collection of stamp duties on various instruments at rates determined in the schedule to the Act.
• The Export Levy Act 2 of 2016 which imposes a 1.5% export levy on all types of unrefined crude oil.
• Customs and Excise Act 20 of 1998 provides for the levying, imposition, payment and collection of customs and excise duties, of a surcharge and of a fuel levy.

The Namibia Revenue Agency (NamRA) is the nation’s tax collecting authority. Established in terms of the Namibia Revenue Agency Act 12 of 2017 as an autonomous agency, NamRA has wide powers and is responsible for administering and enforcing tax laws and customs and excise requirements.

F) Incentives and Exemptions

Goods imported for use solely in operations in connection with the prospecting for, or the min­ing of, natural oil or natural gas may qualify as exempted imports. Duty exemption may also apply to goods cleared from a customs and excise warehouse for petroleum exploration or production activities. Specific procedures need to be complied with to qualify for exemption.

According to the Bank of Namibia, Namibia’s Exchange Control Policies and Laws remain supportive of the nascent oil and gas sector and are designed to promote a favourable investment environment for foreign direct investments (FDIs) while ensuring the smooth operation of economic activities within this sector. Namibia’s exchange control policies allow foreign investors to freely bring in and externalize funds, repatriate profits, and reimburse non-resident shareholders, provided they comply with certain regulatory requirements.

A significant advantage for oil and gas companies operating in Namibia is the exemption from currency conversion requirements. Foreign currency introduced into Namibia can be maintained in Foreign Currency-Denominated Accounts (FCDA) indefinitely, allowing companies to manage foreign liabilities without the need to convert funds into local currency. This flexibility extends to the repatriation of capital, where foreign investors can withdraw their capital without any restrictions in the event of disinvestment, ensuring they retain full control over their investments.

The authors have taken note of the favourable banking arrangements for foreign investors, but further work still needs to be done to the current regulations in place.

Namibia has enjoyed stability since gaining independence in 1990 and the government respects the rule of law, therefore investments in Namibia are guaranteed to be protected and this serves as an incentive to invest in Namibia.

a) Local Content Obligations

There has always been statutory recognition of local content within the petroleum sector. This much is evident in the Petroleum (Exploitation & Production) Act 2 of 1991 as well as the operational Namibian Model Petroleum Agreement. The relevant provisions and clauses make it mandatory for licence holders to comply with local content provisions in the Petroleum Act and the Model Petroleum Agreement. Furthermore, by extension, contractors/service providers are also bound by the local content provisions. The Minister is empowered, subject to the audi alterem partem rule, to cancel a licence for failure to comply with the local content provisions. The following local content provisions appear in the Model Petroleum Agreement and section 14 of the Petroleum Act:

Petroleum Act:

• in the employment of employees to give preference to Namibian citizens who possess appropriate qualifications;
• carry out training programmes in order to encourage and promote the development of Namibians;
• make use of products, equipment and services which are available in Namibia;
• transfer skills and knowledge to Namibians

Model Petroleum Agreement:

• use and purchase goods supplied, produced and manufactured in Namibia;
• consider local technical and economic efficiency by utilizing products, equipment, and services available within Namibia.;
• collaborate with other stakeholders in the petroleum industry to enhance the skills and technological capabilities of Namibian citizens;
• give preference to Namibian supplier, producer or manufacturer and give preference to use of contractors in Namibia where services of comparable standards with those obtained elsewhere are available;
• when importing vehicles, machinery, plant or equipment and such vehicles, machinery, plant or equipment are not purchased directly from a manufacturer, licence holder to effect the purchase of the items through traders operating in Namibia at competitive prices.

b) Domestic Supply Obligation

As highlighted herein above, holders of production licences may be required, at the Minister’s choice, to sell Crude Oil in Namibia to satisfy Namibia’s domestic market requirements on a pro rata basis with other producers in Namibia according to the quantity of Crude Oil produced by each producer.

The Petroleum Act requires that an application for a production licence must include separate decommissioning plans in respect of the production area and any area outside such production area where activities in connection with the production operations are being carried out. These plans must satisfy the Minister of Mines and Energy, in consultation with the Minister of Environment, Forestry and Tourism, the Minister of Fisheries and Marine Resources, and the Minister of Finance, outlining measures to be implemented post-production to remove or manage all installations, equipment, pipelines, and other facilities, whether onshore or offshore, used during operations.

Review and Revision of the Decommissioning Plan

In terms of the Petroleum Amendment Act of 1998, one year before reaching the estimated date on when 50% of the recoverable petroleum reserves in the production area are expected to be produced, the holder of the production licence must review and, if needed, revise and update the decommissioning plan. The Minister may, in consultation with other cabinet Ministers, approve the revised decommissioning plan or request the licensee to make necessary amendments deemed necessary by the Minister.

Trust Fund

Before reaching the estimated date when 50% of the recoverable petroleum reserves in the production area would have been extracted, the holder of a production licence is required to establish a trust fund dedicated to decommissioning facilities.

The Petroleum Act requires licence holders  to ensure good oilfield practices in relation to operations and construction activities offshore as well as the construction, operation and maintenance of pipelines onshore, whereby the Minister may in regard being had to good oilfield practices, give directions to the holder of a licence in relation to the carrying out of reconnaissance operations, exploration operations and production operations, including any works connected therewith.

Regulations relating to the health, safety and welfare of persons employed, and protection of other persons, property, the environment and natural resources, in, at or in the vicinity of exploration and production areas No 190 of 1999 (1999 Regulations) also prescribes the general requirements relating to installations, equipment and facilities. Various NAM/SANS which are applicable to installation and specific storages must also be complied with.

At present, there are no LNG liquefaction or LNG receiving terminals in Namibia.

In 2015 the government commissioned the con­struction of a national oil storage facility and a maritime platform for fuel offloading at the port of Walvis Bay, Namibia. The oil storage facility has three main compo­nents: the Jetty (offloading facility), a 6.5km pipeline, and the Tank Farm. The storage facility is equipped to store various grades of diesel, ULP, HFO, and jet fuel. The facil­ity has three diesel tanks, one with a capacity of five million litres and two with a capacity of twenty-million litres, two ten-million-litre tanks for ULP, one five-million-litre tank for HFO, and one five-million-litre tank for jet fuel.

The Electricity Control Board is currently developing a downstream gas bill. In its current draft form, the downstream Gas Bill seeks to provide for the establishment of a reg­ulatory and licensing framework for gas trans­portation and distribution network, licensing for the downstream gas industry to ensure safety, efficiency and environmental responsibility in the transportation and distribution of natural gas, to facilitate investment in pipeline infrastructure by private, public, municipal and mixed owned enterprises, to promote a competitive market in gas in the long term, and to stimulate cross-border trade in gas between Namibia and its neighbors. There is at this stage no gas storage facility.

No, not at this stage. See answer above at Question 14. At present, there are no third-party access regimes/rights applicable in Namibia in respect of oil and natural gas transportation and the associated infrastructure.

Namibia’s does not at this stage have a competitive or privatized downstream gas market.

While there is currently no specific legal instrument that regulates the downstream gas market, the intention of the legislature is housed under the current proposed Gas Bill and the Namibia Energy Regulatory Authority Bill (“NERA Bill”). Aspects related to the Gas Bill have been addressed above (see answer to Question 14). Regarding the NERA Bill, the purpose of the NERA Bill is to ‘establish a single national energy regulator, the Namibia Energy Regulatory Authority, which will be responsible to regulate the energy sectors identified in the Act; to provide for its functions and duties; and to provide for incidental matters’.

In summary, the regulatory framework of the NERA Bill seeks to mandate NERA as the primary regulatory body for the energy sector (excluding upstream oil & gas). Its responsibilities shall inter alia include:

• Regulating the Gas Market: NERA ensures that market participants comply with regulations and standards.
• Licensing and Oversight: NERA to grants licenses to operators in the gas sector and monitors their activities.
• Tariff Setting: NERA is to be involved in setting and regulating tariffs for gas distribution and retail, ensuring that they are fair and transparent.
• Safety and Standards: NERA is to enforce safety standards and technical regulations for gas infrastructure and operations

The authors expect the current Electric­ity Control Board to transition and become the Namibian Energy Regulatory Authority once the Bill is passed.

On 18 September 2023, the Ministry of Mines and Energy invited interested consultants with the necessary skills and expertise to submit a Request for Proposal to conduct a comprehen­sive peer Review of the current work done  on the petroleum legislative framework (Petroleum Exploration and Production Act of 1991 and its amendments; Petroleum Safety Regulations of 1998; Petroleum Taxation Act of 1991; Model Petroleum Agreement; and Petroleum Products and Energy Act of 1990 and its regulations) and for the consultants to further propose any neces­sary amendments. Various inputs and changes were made to the petroleum legal framework by consultants appointed by the Ministry of Mines and Energy since 2016 and the Ministry of Mines and Energy now seeks the services of an expert consultant to peer review the work done thus far. The process by the Ministry of Mines and Energy to appoint a consultant, in compliance with the procurement laws of Namibia, is still ongoing.

National Upstream Petroleum Local Content Policy

The Ministry of Mines and Energy is presently finalising a comprehensive local content poli­cy to maximise the benefits to be gained from petroleum resources for the benefit of Namibian citizens. The authors understand that the Ministry of Mines and Energy is in the pro­cess of finalising the appointment of an external consultant to finalise the local content policy. The Ministry of Mines and Energy has also in the past reported that the Ministry seeks to undertake an extensive country-wide consulta­tive process and thereafter submit the policy to the cabinet for approval and finalisation.

Stabilization Clauses in the Namibian Energy Sector

The government does not typically agree to stabilization or economic rebalancing provisions in petroleum agreements. There are however no statu­tory restrictions that prevent the government to agreeing to such terms except the cabinet resolution that states, “Economic Stabilisation Clauses should not form part of the Petroleum Agreement to be signed by the Minister of Mines and Energy and the Kudu Upstream Consorti­um”.  However, with Namibia moving from the explo­ration to development and production phase, the calls for economic rebalancing clauses in the petroleum sector are now growing and the authors soon expect the Ministry of Mines and Energy to consider the present reality and publicly pronounce itself on whether economic rebalancing provisions will be introduced in the Petroleum Agreements.

Calls for an Independent Upstream Oil & Gas Regulator

The concept of establishing an independent upstream oil and gas regulator is not new in Namibia. The White Paper on Energy Policy of 1998 resolved that the government will ensure that policymaking, regulatory oversight and industry operations are separated. In addition to the 1998 Energy Policy, the government of Namibia through the National Energy Policy of 2017, resolved to establish an independent regulator for the upstream oil and gas indus­try. Evidently, the government of Namibia has already taken a position on the establishment of an independent upstream oil and gas regula­tor. These are policy goals that the government of the Republic of Namibia will seek to realise, and the authors foresee the establishment of an independent upstream regulator in the near future.

Extractive Industry transparency initiative Namibia

Various stakeholders in the extractive industry have made recommendations for Namibia to join the EITI. The government is still considering whether it would join the Extractive Industries Transparency Initiative (EITI). An assessment was conducted whereafter a report was submitted to the Ministry of Mines and Energy. The Ministry of Mines and Energy is still reviewing the report and will forward its recommendations on the best option for Namibia to Cabinet for approval once finalised.

In terms of the upstream oil & gas sector, Namibia has recovered from the aftermath of the Covid-19 pandemic. Since 2021, drilling activities have been ramping up in Namibia, with more than 17 wells drilled. In addition, Total Energies allocated about NAD5.7 billion for exploration and appraisal work in the country’s budding oil sector. In June 2023, Upstream Online reported that Namibia accounted for about 13% of all offshore rigs operating in Africa. According to a recent report, in the past three years alone, there have been 15 new contracts awarded or exercised contract options taken up, equating to approximately 1,700 days (or 4.4 years) of rig demand for operators to conduct work offshore Namibia.

It has further been reported in August, that the recent oil & gas discoveries in Namibia has sparked interest in Namibian assets, with an index fund tracking local government bonds poised for its biggest annual jump on record. The Exchange Traded Fund tracking local government bonds is listed on the Namibian Stock Exchange and in South Africa has jumped over 20% in U.S. dollar since Galp’s discovery.

It is however important to note that generally, financing for oil and gas projects in Africa will be affected by the energy transition.  There is therefore a race against time in light of energy transition. Further, considering that the discoveries are offshore in deepwater, Namibia will be in competition with countries that offer various terms, including economic equilibrium clauses to investors. Adding an economic equilibrium clause to the petroleum agreement, coupled with its political stability and legal regime, will be key for Namibia to continue attracting investment in the oil & gas sector as well as the development of oil & gas discoveries.

Namibia is an importer of all its fuel and petroleum products, and Russia’s invasion of Ukraine, adversely indirectly impacted the price of fuel in Namibia locally, with drastic increases in price of petrol and diesel at service stations. These increases were most absorbed by consumers, who were economically the most affected by the invasion.

Namibia has been proactive in promoting renew­able energy through various policies and pro­grammes. Namibia became a signatory of the Paris Agreement on Climate Change in New York, on 22 April 2016. Other than the international instruments, there are no major specific laws that are focused on energy transition in Namibia at this stage. In terms of policies, the National Energy Policy and the National Renew­able Energy Policy emphasizes the development of renewable energy to enhance energy security and sustainability. It sets targets for increasing the share of renewable energy from the available diverse energy sources. In terms of the Harambee Prosperity Plan II, one of the goals was to investigate the feasibility of Green Hydrogen and Ammonia as a trans­formative strategic industry. In addition, The Executive Director in the Ministry of Justice recently made reference to a team that will seek to address climate justice issues in Namibia.

In respect of projects, Namibia has ambitious plans to increase its reliance on renewable ener­gy sources, including solar power. The Renew­able Energy Feed-In Tariff (REFIT) programme, for instance, encourages independent power producers to generate electricity from renew­able sources like solar and wind. Namibia’s Green Hydrogen Council launched Namibia’s Green Hydrogen Strategy at COP27 in Sharm El-Sheikh, Egypt in November 2022. It aims to position the country as a global leader in green hydrogen production.

Notwithstanding Namibia’s clean energy ambitions, it is important to take note that Namibia embraces all forms of energy, and Namibia’s intention is to harness all forms of energy including solar, wind, biomass, green hydrogen, fossil fuel resourc­es, including natural gas for the jurisdiction’s domestic, regional, and continental needs.