Namibia’s existing legal and policy framework is sufficiently robust to support the country’s transition into oil and gas development and production, but key reforms are still needed to align legislation with modern industry requirements, according to specialised Energy Lawyer and Managing Partner of SNC Incorporated, Shakwa Nyambe.
Speaking to Namibia Mining and Energy, Nyambe said the country is well positioned to move into the next phase of its emerging petroleum industry despite gaps in its regulatory architecture.
“I believe we are ready. Although we are not 100% there yet, what we have so far is sufficient to take us to the next level of the oil and gas industry, which is development and production,” Nyambe said.
He said Namibia’s 2017 National Energy Policy currently provides the overarching framework for promoting the country’s hydrocarbon potential, local content development, regulatory oversight and improvements to the legal framework.
According to Nyambe, the sector’s principal legislation remains the Petroleum (Exploration and Production) Act of 1991, which governs licensing, operators’ obligations and the relationship between industry participants and government.
However, he argued that the legislation was drafted at a time when Namibia had not yet made world-class hydrocarbon discoveries and therefore requires significant updating.
“It is a 1991 piece of legislation. Obviously, it requires a lot of amendments to ensure that we align with current international standards,” he said.
Nyambe noted that the existing law was primarily designed for an exploration-focused industry and does not adequately regulate the transition from discovery to development and production.
“We need to work on improving the legislation, especially by introducing more regulations governing the transition from discovery to development, as well as regulations relating to production,” he said.
He added that while other laws, including environmental and marine legislation, complement the petroleum framework, the Petroleum (Exploration and Production) Act remains the core statute requiring enhancement.
Beyond upstream regulation, Nyambe said Namibia should establish a comprehensive legal framework for managing petroleum revenues.
“If we are going to receive revenue from oil and gas, we will need legislation on revenue management,” he said.
He also called for stronger rules governing the country’s sovereign wealth arrangements to ensure that petroleum income is preserved and invested for future generations.
“We need supportive regulations and legislation to ensure that our Sovereign Wealth Fund is effective,” Nyambe said, adding that legislation should clearly define how funds are deposited, when withdrawals are permitted and where investments can be made.
Despite these outstanding reforms, he maintained that the current framework is adequate to allow Namibia to continue advancing major petroleum projects while legislative updates are undertaken.
“What we have at the moment is adequate to allow us to progress to the next level of development in terms of oil and gas while we are revising and realigning our current legislative framework,” he said.
Nyambe also highlighted the importance of periodically reviewing Namibia’s fiscal regime for the sector. He said provisions governing royalties, corporate taxes and other charges under the petroleum framework should be reassessed over time to ensure they remain competitive for investors while delivering fair returns to the state.
“With time, we may have to review whether our petroleum fiscal framework is adequate and progressive in nature, while also encouraging investment and ensuring that government benefits from the country’s resources,” he said.
