Namibia is on the cusp of an economic transformation as its budding oil industry is projected to generate N$105.9 billion (U$5.6 billion) per annum in state revenue, an official has revealed.
The revelations follow the discovery of substantial oil reserves in the Orange Basin, offshore Namibia, near Lüderitz, by global energy giants Qatar Energy, Shell, and TotalEnergies.
National Petroleum Corporation of Namibia (NAMCOR) Executive for Upstream Development and Production Mtundeni Ndafyaalako who revealed the revenue projections, said there is potential for the country’s economic diversification through the exploration and exploitation of its newfound oil resources.
“The project, which I have been passionately advocating, is already in the development stages and is projected to potentially double Namibia’s Gross Domestic Product (GDP) by the year 2040. Between 2033 and 2043, the oil and gas sector is anticipated to make an average annual contribution of approximately U$17 billion to Namibia’s GDP,” Ndafyaalako told a recently held oil seminar.
“What these staggering figures imply is that during this period, oil, either on its own or in conjunction with gas, will make up nearly half of Namibia’s GDP. At the peak of production, a confluence of estimated revenue from royalties, corporate taxes, and additional profit taxes could amass a substantial U$5.6 billion annually in state revenue,” he said.
This comes as research shows that Namibia could register a GDP of N$699 billion (U$37 billion) at peak production level from the country’s newly discovered oil reserves.
According to research conducted by Wood Mackenzie, direct value added could come around N$567 billion (U$30 billion) by 2043.
At the same time, the GDP is projected to be valued at around N$378 billion (U$20 billion).
The latest revelations come as authorities in the country are optimistic about the future economic prospects.
The executive noted that the Venus & Graff pre-appraisal estimates are set to generate over 3,600 jobs at peak, with the potential to maintain these levels with the correct management of skills gained.
He further reiterated that Namibia is poised to receive benefits of up to 54% when the production of the recently discovered oil reserves commences six years from now.
NAMCOR has a 10% free-carry stake in the joint-venture oil exploration and appraisal with Qatar Energy and Shell, which has discovered four wells about 270km offshore Namibia’s coast.
The joint-venture group comprises Shell Namibia B.V (45%), QatarEnergy (45%) and NAMCOR (10%).
