… as Chevron enters Namibia’s oil rush

Staff Writer

Namibia and a range of other oil-producing countries are thinking of investing in regional oil refineries to cut the cost of importing from European countries, mines minister, Tom Alweendo, has said.

Alweendo spoke to journalists this week after jetting back from an oil and gas conference held in Senegal where discussions on what to do with the oil being discovered in many African countries were underway.

By July of this year, there were about 10 East, South, and Western African countries that had made big discoveries of oil with Namibia having also made a breakthrough down south in a TotalEnergies venture in which Namcor holds a 10% stake on behalf of the government.

“We just came back from an oil and gas conference that was held in Senegal. Senegal has discovered a lot of oil and gas, so has Ghana and so has Uganda although they haven’t produced yet, so has Equatorial Guinea, so has Angola, so has Nigeria and we have also just discovered.”

“So, at that conference again there was this discussion to say, over the longest time period, most of the refineries are actually in Europe. Not even in the Middle East. It’s either in the Netherlands or you might also have big refineries in the UK.”

“The question was if Africa is really now continuing to discover their oil, setting aside the issue of the energy transitions, will it not be a good idea then to say you have regional refineries which would then be fed by all countries in that particular region producing oil,” he said.

With this now on the cards, however, such an undertaking would require huge investments and will require a couple of years to take off, the minister said.

The initiative would imply that governments will have to find people interested to invest in the refineries, he also said.

“To build a refinery will cost you billions of dollars. Hopefully, then, the countries, combined with the private sector within the African continent will then be able to fund that investment and refine the crude,” he said.

Alweendo said this should not imply that fuel would be cheaper for the region.

“The answer is yes and no. Let’s not assume that if you have regional refineries it’s going to be cheaper. You are going to cut out transportation, but for me, the refinery doesn’t have to be in a country where you produce oil. It should probably be in a country where it’s easy to be logistically distributed to whoever needs it,” he said.

In the meantime, American multinational oil giant, Chevron Corporation, has entered the domestic oil space joining the rush for black gold, 40 years after leaving Namibia.

This has also been confirmed by Alweendo, after so much speculation last August; however, the company has not made a direct application to the line ministry.

“Exploration in our water has taken, I mean since the last 32 years there have been people who have come and gone and up to now, we have got about 32 wells that were drilled and were dry. Suddenly this year two wells have been drilled and they have a discovery. In itself, people have realised there is oil in Namibia and therefore people want to come.”

“So, we can confirm that and I think since that discovery, we have been having more applications for the blocks that are still available because as you know those blocks are already there. You just go on the map and see where it is not applied for and you can still apply for that block.”

“Yes, we can also confirm that Chevron has approached, they did not apply for a block themselves, there was already a block that had owners so, Chevron has approached those owners to buy into that block. That we can confirm, but not their own application,” said the minister.