Africa-Press – Namibia. BRIDGET Venner, Vice-Chairperson of the Namibia Petroleum Operators Association (NAMPOA), stated that since independence, over N$30 billion has been spent by investors on offshore and onshore explorative activities, whilst a total of N$6 billion has gone into these activities over the past six years.
While the two recent light oil discoveries offshore Namibia’s orange basin by TotalEnergies and Shell have evoked much debate on the equitable sharing of this natural resource should it be confirmed to be of commercial value, Venner elucidated further detail the overall fiscal share government could stand to make from these recent discoveries at a media information workshop hosted at the National Petroleum Corporation of Namibia (NAMCOR).
Venner shared that currently there is a huge potential that there could be a commercial oil discovery in the country, however, said that the oil sector is a high-risk sector with eight out of 10 ventures destined to fail.
The multinational oil giants, Shell and TotalEnergies, are said to be currently conducting appraisal activities to determine the commerciality of their discoveries.
Giving insight into Namibia’s fiscal share in these deals, Venner stated that government would stand to make 55% to 65% once production has started. “Namibia has been clever in setting up its fiscal system. Government makes good returns on windfall profits (Additional Profit Tax). This means that when there is a rise in profits governments share also rises.” Venner said.
Other taxes which made up for the 55% to 65% share include NAMCORs 10%, Petroleum Income Tax, Fees and Training and Other Taxes. Venner stated that government spends zero money on these upstream activities which are highly capital intensive.
In a Question and Answer session, presenters were queried further on why NAMCOR does not push to further increase the 10% shared interests it holds in oil ventures.
This was however met with disagreement, with Klaus Endresen, Chairperson of NAMPOA, posing to a journalist: “If the government had spent N$30 billion since independence on oil and gas explorative activities with little to show for it, how would the media report on it?”. Endresen further noted that risks in the explorative sector are high with investors losing billions.
Manfriedt Muundjua, Executive Upstream Development and Production activities at NAMCOR, reverberated the same sentiments, stating: “Let us not redirect our inabilities to investors, The oil is ours but we are unable to extract it. It is a costly exercise,” Muundjua said. He reflected that from 2015 onwards government shared that it could not carry costs in this venture due to the economic downturn.
Currently, the country has no laws that regulate the share in which state-owned companies should get in these oil ventures, however, Muundjua said that this is not something to be admonished but applauded as these are industry rates on a local as well as international level.
For More News And Analysis About Namibia Follow Africa-Press
