Namibia could pursue the development of a petroleum refinery over the long term as part of efforts to retain more value from its emerging oil and gas industry, according to the Upstream Petroleum Unit in the Office of the President.
Charles Mbeha, Deputy Director for Compliance, Regulation and Local Content at the Upstream Petroleum Unit, said Namibia should consider refining capacity as part of a broader strategy to increase domestic value addition from its petroleum resources.
“In-country value. Everything that we do has to be focused on ensuring that there is value in the country. We need to retain value as much as possible, whether through goods or services,” Mbeha said.
“Even in the long run, we need to look into the aspect of a refinery because that will assist in maximising value within the country.”
He cautioned, however, that establishing a refinery would require substantial capital investment and careful planning, including consideration of long-term operating and maintenance costs.
“That is an expensive exercise and it should be properly planned. You can’t just come up and put a refinery. It requires a lot of money to build and to maintain,” Mbeha said.
He said the government could consider creating favourable conditions for private investors interested in developing refining capacity in Namibia.
“You may have someone who may come in and say, ‘I want to put a refinery’, and then you see how you can put favourable conditions as government for that person to put a refinery because, when that happens, you will really get a lot of in-country value,” he said.
Mbeha said Namibia’s local content strategy should extend beyond direct employment and participation in the oil and gas industry, with petroleum revenues expected to stimulate economic activity across other sectors.
He cautioned against an approach that assumes all Namibians need to become directly involved in the petroleum industry to benefit from the sector.
“We shouldn’t just look at it to say all of us are going to become oil and gas experts. Others who may even make more money will be far from the sector because the money which will come in, as government is spending that money, will stimulate others,” he said.
Mbeha said social and economic inclusion would also form part of the country’s local content framework, following concerns that petroleum opportunities could benefit only a limited number of people or regions.
“One of our guiding principles is to say it should be inclusive. It doesn’t matter which part of the country you are coming from. As long as you meet the requirements and you pass the requirements, you should be able to participate,” he said.
He said the proposed local content policy is also intended to address inconsistencies in how petroleum companies apply existing local content requirements.
According to Mbeha, Namibia already has local content provisions under Section 14 of the Petroleum (Exploration and Production) Act, but the existing provisions lack sufficient clarity, resulting in different interpretations by oil companies.
“Currently, it’s not that we do not have local content provisions. We do, in terms of the Petroleum Exploration and Production Act, Section 14, but the way it is crafted is not clear enough and we have found that oil companies apply it differently,” he said.
“Hence, from that, we have come up with this policy to ensure that it should be applied in a uniform way and it should be clear that there are no questions on how things should be done.”
Mbeha said the regulatory framework should balance the interests of the government, Namibians and investors while strengthening transparency and accountability in the allocation of opportunities.
“Transparency and accountability in what we do. We need to be transparent. People need to understand how selections are done, how people are employed,” he said.
He added that the policy should remain consistent with international best practice and Namibia’s Constitution, particularly Article 100, which deals with the ownership of the country’s natural resources.
“As we are coming up with this policy, we understand that in terms of Article 100, the resources belong to the Namibians. So, in how you are dealing with this policy, you need to ensure that it is talking to Namibians. How will the Namibians benefit?” Mbeha said.
