Namibia’s Mines and Energy minister, Tom Alweendo, says joint ventures between foreign and local companies are a critical driver for local participation in oil exploration.
The sector demands significant capital investment, making such partnerships crucial.
Minister Alweendo addressed concerns about local participation in the booming industry and said exploration can be expensive and most Namibian companies lack the necessary funds.
“We all know that petroleum exploration is a highly capital-intensive process and most local companies are not able to raise the funds needed to carry out exploration on their own,” he said.
Alweendo added that foreign companies seeking licences are encouraged to partner with local firms.
These partnerships offer an entry point for local companies, though foreign firms have sole discretion in choosing their partners.
“We therefore encourage foreign companies to enter into joint ventures with local companies. How to identify local joint venture partners is entirely left to the foreign companies,” he said.
He further emphasised that the licensing process is designed to be transparent, with an evaluation committee and a public registry of licences.
“To minimise the risk of collusion between the Minister and the Commissioner, we have instituted a Licensing Evaluation Committee to assist the Commissioner in the evaluation of the applications,” he said.
He highlighted that this approach allows Namibia to benefit from foreign expertise and investment while fostering local involvement in the oil and gas sector.
Alweendo also clarified the process of relinquishing and re-applying for exploration blocks.
He explained that companies give up the specific area they are exploring, not the actual exploration licence itself.
“A licensee can decide to relinquish the block for various reasons. It can be because they have formed the view that the block does not have potential for hydrocarbons or because they have run out of the maximum allowable time and the only way to continue the exploration is by way of applying anew,” he said.
The Minister added that when a company relinquishes a block and then re-applies for it, the application is treated entirely as a new one.
The previous attempt to explore the block has no bearing on the decision for the new application.
“In a case where a licensee relinquishes a block and re-apply for the same block, the application is treated as new and considered on its own merit and not on what transpired before,” he explained.
