{"id":16208,"date":"2022-04-02T16:39:41","date_gmt":"2022-04-02T16:39:41","guid":{"rendered":"https:\/\/www.africa-press.net\/namibia\/all-news\/what-the-constitution-and-petroleum-act-say-on-ownership-of-oil-discoveries"},"modified":"2022-04-02T16:57:07","modified_gmt":"2022-04-02T16:57:07","slug":"what-the-constitution-and-petroleum-act-say-on-ownership-of-oil-discoveries","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/namibia\/all-news\/what-the-constitution-and-petroleum-act-say-on-ownership-of-oil-discoveries","title":{"rendered":"What the Constitution and Petroleum Act Say on Ownership of Oil Discoveries"},"content":{"rendered":"

Africa-Press – Namibia. <\/strong><\/span>THIS OPINION PIECE is urgent following oil discoveries announced by Shell Namibia Upstream B.V. and TotalEnergies in February 2022. Sadly, public discussions have been less than salutary. Therefore, I have to clarify president Hage Geingob’s statement during an interview on Aljazeera shortly after the announcements by the companies, proprietors of the exploration licences.<\/b><\/p>\n

Responding to a question from the journalist, president Geingob clarified that the oil belonged to those with the right to extract it, and on a majority shareholding basis. Logically, explicit in that point by the president is that for national development, the government would extract royalties\/taxes from the companies.<\/p>\n

Regrettably, the president’s clarification led to an unnecessary outcry, with some suggesting that the government did not have the interest of the nation at heart. The contrary is true. Our planning initiatives demonstrate the strides we have made as a country.<\/p>\n

Still, it is important to locate the ownership debate. The discoveries in question were followed by intensive drilling operations in two wells located 300km south-west of the port of L\u00fcderitz and in some of the deepest waters in the world.<\/p>\n

THE ISSUES<\/p>\n

So, what are the issues? A cursory overview of the applicable legal instruments is paramount for a common understanding of the differences between ownership on one hand, and rights and obligations on the other. Erring on the side of caution, we will do ourselves a disservice should we not provide clarity to citizens on the issuing of petroleum exploration licences to oil companies.<\/p>\n

The Petroleum Act of 1991 is the principal legislation governing the petroleum sector, with supporting petroleum agreements and joint operating agreements. Relating to rights, Section 2 of the act is clear: \u201cSubject to any right conferred under any provision of this act all rights in relation to the reconnaissance or exploration for, production and disposal of, and the exercise of control over, petroleum, vest, notwithstanding any right of ownership of any person in relation to any land under which petroleum is found, in the state.\u201d<\/p>\n

The only other time when rights are conferred to a third party is when such a party has been issued with an exploration licence or production licence. Reference to the aforesaid can be found in sections 29 and 44 of the act.<\/p>\n

Consistent with our laws, both Shell and TotalEnergies own the rights to the exploration licences under which the oil was discovered. These rights, obligations, percentage shareholding of each party to a licence and Namcor participation, are codified in a petroleum agreement.<\/p>\n

As a constitutional democracy of processes, systems and institutions, changes, including additional shares to the state\/Namcor, must only be done in accordance with provisions agreed to in the petroleum agreement.<\/p>\n

Without doubt, article 100 of the Constitution states that ownership of all resources, including oil and gas within Namibia’s borders, belong to the Namibian people. But the Constitution further says that such ownership must be exercised within the limits and confines of the law, including duly signed agreements between the state and third parties.<\/p>\n

Conscious of article 100, president Geingob spoke to the issue of Shell and TotalEnergies within the confines of duly signed agreements between the state and these third parties. There is an explicit agreement between the state and licence holders (to whom rights and obligations are conferred) in return for the state to share in the upside of discoveries.<\/p>\n

Licence holders must search for petroleum, extract it once discovered, and pay taxes\/royalties to the state, while retaining the right to pay for the investments and earn profits for risks incurred.<\/p>\n

Our Constitution qualifies Namibia as a mixed economy. In fact, the government could play the role of the investor as well, if it could raise the billions required to perform all the work required for exploration to extraction.<\/p>\n

HUGE COSTS<\/p>\n

To have a chance of making a discovery, huge sums of money are required. Up to N$300 million for exploratory work, and a further N$1,5 billion for a single well. Once discovery is confirmed, an additional three to four wells are required to determine if the discovery is commercial or not.<\/p>\n

Around N$30 billion has been spent since independence to search for oil. No one would cheer any sitting president to continue spending such sums of taxpayer’s money without the prospect of discoveries. While we are only reflecting on the Shell and TotalEnergies discoveries, such triumphs have been preceded by colossal losses in around 30 wells since 1990.<\/p>\n

As an investment destination, Namibia must treat private companies in accordance with the law, even if they have found oil. More so, after the huge sums of money invested in the venture and the risks involved.<\/p>\n

We should be excited about these discoveries. Profound pragmatism on our part as a country is needed and we should take due regard of the value that will accrue to Namibia once the oil has been sold. That is the message of the president.<\/p>\n

* A mineral and petroleum geologist by training, Obeth Mbuipaha Kandjoze is director general of the National Planning Commission<\/p>\n

For More News And Analysis About Namibia<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Namibia. THIS OPINION PIECE is urgent following oil discoveries announced by Shell Namibia Upstream B.V. and TotalEnergies in February 2022. Sadly, public discussions have been less than salutary. Therefore, I have to clarify president Hage Geingob’s statement during an interview on Aljazeera shortly after the announcements by the companies, proprietors of the exploration […]<\/p>\n","protected":false},"author":84,"featured_media":16207,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,6,8,16],"tags":[234,236,233],"class_list":["post-16208","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-files","category-homepage-english","category-twitter","tag-africa-press","tag-africa-press-namibia","tag-namibia"],"yoast_head":"\nWhat the Constitution and Petroleum Act Say on Ownership of Oil Discoveries - Namibia<\/title>\n<meta name=\"description\" content=\"THIS OPINION PIECE is urgent following oil discoveries announced by Shell Namibia Upstream B.V. and TotalEnergies in ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/namibia\/all-news\/what-the-constitution-and-petroleum-act-say-on-ownership-of-oil-discoveries\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What the Constitution and Petroleum Act Say on Ownership of Oil Discoveries\" \/>\n<meta property=\"og:description\" content=\"THIS OPINION PIECE is urgent following oil discoveries announced by Shell Namibia Upstream B.V. and TotalEnergies in ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/namibia\/all-news\/what-the-constitution-and-petroleum-act-say-on-ownership-of-oil-discoveries\" \/>\n<meta property=\"og:site_name\" content=\"Namibia\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2022-04-02T16:39:41+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-04-02T16:57:07+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/nambia\/sites\/29\/2022\/04\/img-62488037c71db.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"750\" \/>\n\t<meta property=\"og:image:height\" content=\"499\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/namibia\/all-news\/what-the-constitution-and-petroleum-act-say-on-ownership-of-oil-discoveries#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/namibia\/all-news\/what-the-constitution-and-petroleum-act-say-on-ownership-of-oil-discoveries\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/namibia\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"What the Constitution and Petroleum Act Say on Ownership of Oil Discoveries\",\"datePublished\":\"2022-04-02T16:39:41+00:00\",\"dateModified\":\"2022-04-02T16:57:07+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/namibia\/all-news\/what-the-constitution-and-petroleum-act-say-on-ownership-of-oil-discoveries\"},\"wordCount\":859,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/namibia\/all-news\/what-the-constitution-and-petroleum-act-say-on-ownership-of-oil-discoveries#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/nambia\/sites\/29\/2022\/04\/img-62488037c71db.jpg\",\"keywords\":[\"africa press\",\"Africa Press-Namibia\",\"namibia\"],\"articleSection\":[\"all news\",\"files\",\"homepage-english\",\"twitter\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/namibia\/all-news\/what-the-constitution-and-petroleum-act-say-on-ownership-of-oil-discoveries#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/namibia\/all-news\/what-the-constitution-and-petroleum-act-say-on-ownership-of-oil-discoveries\",\"url\":\"https:\/\/www.africa-press.net\/namibia\/all-news\/what-the-constitution-and-petroleum-act-say-on-ownership-of-oil-discoveries\",\"name\":\"What the Constitution and Petroleum Act Say on Ownership of Oil Discoveries - 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