General Thoughts, page-8772

Namibia E&P players await clarity after president takes direct control of oil and gas

"All eyes will be on Namibia President Netumbo Nandi-Ndaitwah next week when she gives the keynote speech at a major upstream event in Windhoek after her recent move to centralise control of oil and gas in her office. Her reorganisation follows in the footsteps of similar moves made by Nigeria’s President Bola Tinubu — and his predecessor Muhammadu Buhari — who also has direct control of the West African nation’s critical, revenue-earning oil and gas sector. Nandi-Ndaitwah — known locally as NNN — took power in March, four months after winning an election for the long-ruling SWAPO party, albeit the party itself had a reduced majority. Graham Hopwood, special advisor on Namibia for Horizon Engage — a research and advisory firm focused on political risk — told Upstream that it is somewhat unclear how the new administration will handle the oil and gas portfolio. "The decision to move oversight of the oil and gas sector to the presidency has raised questions within the industry, particularly as details about how the new arrangement will function have yet to be clarified," he said. “While this may provide reassurance to some stakeholders concerned about regulatory direction, the lack of concrete information has contributed to a sense of uncertainty."

Shakwa Nyambe, managing partner at Windhoek-based legal firm SNC Incorporated, which has represented upstream players in the country, argued in a comment piece for Namibia Economist that: “While this move seems abrupt, it is not an unusual step, and promises continuity and potentially enhanced benefits for all stakeholders in the long term.” The decision to place Namibia’s oil and gas sector under the office of the president, he wrote, “can be viewed as a strategic move aimed at accelerating oil and gas reforms and modernising the industry’s regulatory framework,” suggesting it could mean faster approvals, a more transparent regulatory environment, and a strengthened framework for long-term partnerships. According to Nyambe, a former executive at state oil company Namcor, the move will accelerate modernisation of Namibia’s petroleum legislation, petroleum regulations and local content framework and help establish a petroleum regulator and a stand-alone Ministry of Petroleum. With NNN now having direct control of a sector expected to drive economic growth from the 2030s, the general view is that Natangwe Ithete, the Minister of Industry, Mines & Energy — and also Namibia’s Deputy Prime Minister — will have less influence over oil and gas affairs than was the case under his predecessor Tom Alweendo.

Hopwood said Ithete was “a surprise appointment,” stressing how he has previously advocated for greater state participation in the extractive sector, a policy goal that worries investors. “Mining and energy companies will be hoping that his firebrand rhetoric in this regard does not translate into radical policy changes." A source familiar with Namibia’s political firmament said NNN's move to exert direct control over oil and gas “may be something of a relief for the international oil companies who definitely would not want to be operating under Ithete,” perceived as a resource nationalist who previously called for government to have minimum 50% stakes in extractive industry projects. The selection of Ithete — previously in the Swapo youth league — as both Deputy Prime Minister and Minister of Industry, Mines & Energy “was something of a shock,” said the source, adding that when deputy minister of finance between 2015 and 2020, he “left little impression and was subsequently relegated to the backbenches.”

Under the new government structure, there is currently a lot of discussion in Namibian industry circles about the role to be played by Petroleum Directorate, currently part of Ministry of Industry, Mines & Energy (MIME) and headed by Petroleum Commissioner Maggy Shino. With Alweendo’s departure, Shino is now considered to be Namibia’s top oil and gas official. A well-connected executive in Windhoek told Upstream last week that, having discussed the matter with contacts in Windhoek, the emerging view is that Shino is likely to be based in State House — the presidential compound in the capital city’s southeastern suburb of Auasblick — and not at MIME on Aviation Road, close to Namcor's office. If this happens, one informed source suggested that the Petroleum Directorate would be carved out of the ministry and placed in the presidency, leaving MIME to handle industry, mines and downstream oil and gas matters.

In the meantime, Shino is said to be reporting directly to NNN, although a knowledgeable source said there is heightened speculation that “there’s going to be somebody in between Maggy and NNN… something like a chief of staff.” One oil company executive active in Namibia said: “I think Shino will have more influence than the minister,” adding that she is expected to become a special advisor. “I think that where the information is trending; I don’t think that’s necessarily a bad thing.” Another source said the key goal of bringing oil and gas under the presidency is linked to project execution speed when it comes to upcoming developments such as TotalEnergies’ Venus and Galp’s Mopane in the Orange basin.

According to the MIME website, the Petroleum Directorate and Shino remain at the ministry. Upstream approached the ministry with questions about Shino’s position and the future of the Petroleum Directorate. Meanwhile, Namcor recently announced the appointment of Victoria Sibeya as acting managing director, replacing Ebson Uanguta who was pulled into the parastatal after the departure of former boss Immanuel Mulunga. Previously head of upstream exploration, Sibeya is a well-known face in oil and gas circles, having joined Namcor in 2006."