May 15, 2024
Economy

Namibia sticks to its guns over fossil fuels

August 16, 2023
Namibia sticks to its guns over fossil fuels

Mines and Energy Minister Tom Alweendo says Namibia will continue using fossil fuels despite pressure from developed countries for the world to adopt clean energy sources to combat climate change.

"What I, however, find unreasonable is when some countries and global interest groups demand that the energy transition takes place in a linear fashion, completely disregarding the livelihood of those affected. This kind of a mindset is so condescending, and it shows a total lack of concern about the immense socioeconomic development challenges faced by developing countries, such as ours," he told a gathering in Windhoek on Wednesday.

"We are therefore calling for an energy transition that is just and equitable among nations. However, recognising the inevitability of the energy transition, we understand and accept that fossil fuel may no longer be the fuel of the future and that the world is transitioning to renewable energy. It is for this reason that we, together with the international oil companies, need to ensure that our oil sector is being developed with the lowest carbon emissions from the inception."

The minister noted that such a route will be the most effective way to ensure that the oil sector is competitive in the global markets. He, however, cautioned that Namibia’s discovery of oil will not automatically remedy all of the country’s socioeconomic challenges.

"The oil and gas discoveries in commercial quantities have raised our expectations for significant revenue flow and employment opportunities for Namibians. Indeed, the discoveries hold a great potential to improve our socio-economic challenges. However, the development of an oil sector is inherently associated with uncertainties and complexities. 

“One can think of uncertainties associated with issues of quantity, quality, production rate and oil price, and some of these uncertainties remain over the lifetime of an oil production project" he warned.

Speaking at the same occasion, Prime Minister Saara Kuugongelwa-Amadhila said Namibia needs to utilize its natural resources to develop the economy.

"Although low-carbon Industrialisation is the goal, African countries agree that it is a costly one. In order to get part of the global energy transition, Namibia needs to exploit all its resources to generate the revenue required to transition into a low carbon industrialized economy," she said.

For the industry to flourish, she added, the government will implement governance structures that are responsive, progressive and fit for the purpose. These will be done by crafting legislation and policies that include a progressing tax regime, local content policy that maximise revenue to treasury, while providing clarity, transparency and fairness to all involved. 

Prior to Namibia discovering billions of barrels of oil in five wells situated offshore of Namibian coast, among them Venus, Graff 1, Lorena, 37 wells were drilled since the first discovery of the Kudu Gas in 1974.

The industry has the potential to create thousands of jobs and the potential to increase GDP to US$37 billion by 2040, while the government is set to benefit about 54% in revenue collections.

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Last modified on Thursday, 17 August 2023 21:02
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