The town of Luderitz could be on the brink of an economic boom after it was revealed oil majors Shell and TotalEnergies, who are currently conducting appraisal work on their oil discoveries off the coast of Namibia, have heeded government calls for them to use the town as their base of operation and not Walvis Bay.
The development comes after calls by Mines and Energy Minister Tom Alweendo in November last year to the two companies to base their operations at Luderitz rather than Walvis Bay in order to stimulate the local economy.
Petroleum Commissioner Maggy Shino made the announcement at the Africa Energy Chamber (AEC) event in London, stating: “Shell and Total are using the port of Luderitz as a hub for their activities”.
The decision to use Luderitz as their base of operations follows the recent discovery of oil by Qatar Energy, Shell, and TotalEnergies in the Orange Basin located offshore near Luderitz.
While some analysts have warned that the opportunities created, such as jobs, may be temporary, they acknowledge that the development will bring benefits to the local infrastructure.
Shino also revealed that Shell’s Jonker-1 exploration well is “going very well”, a pronouncement that comes amid reports Shell has reportedly found hydrocarbons in the well which it began drilling in December to check for a possible eastern extension of Total’s Venus find.
“I’m not saying anything apart from to say it is going well, it is going very well,” Shino told the event.
Total has chartered the Tungsten Explorer for its appraisal work and the Deepsea Mira will begin work in Namibia in the second quarter of the year. The Deepsea Bollsta is working on Shell’s Jonker well.
“The whole of offshore Namibia is ready. In terms of deep-water potential, the Luderitz Basin is calling for you, the Walvis Basin, the Namib Basin, and onshore, the Owambo Basin and the Karoo have shown their potential. All of these have possibilities,” Shino said.
Namibia is hoping that the recent energy developments will bring in increased foreign and domestic investment into the gas and oil sectors, as well as the broader economy, in the short and medium term.
The Shell and TotalEnergies discoveries have the potential to generate annual taxes and royalties of between N$60-N$95 billion and create 3,600 jobs at the peak of production, according to the Presidency.
Furthermore, international experts such as Wood Mackenzie estimate that Namibia could receive as much as N$500 billion in Foreign Direct Investment in this regard.
In addition to oil exploration, Luderitz and Namibia’s Southern region will also host Green Hydrogen projects.
The Namibian government is betting on the recent energy developments to accelerate the country’s economic recovery.
