Namibia’s sizeable 2022 discoveries – the Graff-1 discovery made by Shell and the Venus discovery by Total Energies are expected to kickstart the country’s oil and gas boom as well as a new era of increased exploration, production, and monetization of hydrocarbons in the southern African country. The Graff discovery, with its 2 billion barrels of oil equivalent, and Venus find will not only turn Namibia into a regional energy hub, unlocking the exploitation of the country’s 11 billion barrels of oil and 2.2 trillion cubic feet of natural gas reserves, but the discoveries will have a profound impact on the country’s socio-economic development.
Firstly, the projects will likely double the projected gross domestic product (GDP) growth of 3.5% year on year from 2022 through 2050, resulting in an increase in government revenue and spending, employment creation, and infrastructure development, as well as investments in other sectors of the local economy. Initial estimates show a combined share of over $40 billion accruing to the Namibian government from these discoveries, a gamechanger for the country’s economy. Secondly, with Namibia struggling with energy security issues, the Graff and Venus discoveries have the potential to help the country ensure energy independence, affordability, reliability, and improved access, while at the same time enabling economic diversification.
However, serious planning and reforms from a regulatory, fiscal and economic point of view will need to be implemented to ensure the discoveries accelerate Namibia’s economic goals. In this regard, Namibia needs to develop a detailed roadmap of how to fast track the rollout of the projects while putting in place an investor-friendly regulatory, fiscal, and business environment. The National Petroleum Corporation of Namibia (Namcor) will need to be modernized so that its operations and structure meet international standards whilst the evolution of the country’s energy supply chain is accelerated and local content development prioritized.
Namibia must learn from other African energy projects including Ghana’s Jubilee fields, Eni and ExxonMobil’s Rovuma Deepwater gas projects in Mozambique, Kenya’s onshore and offshore projects, and Tanzania’s gas projects, which have been discovered, delayed, and or developed across Africa over the past 20 years. Lessons can be taken from these projects, particularly regarding the development of investor-friendly fiscal regimes.
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