CHAMWE KAIRA
The recently discovered oil fields offshore Namibia could potentially be one of the last big oil and gas discoveries in the world.
Laurent Ruseckas, executive director, gas industry, Europe, the Middle East and Africa at S&P Global told Observer Money that Namibia maybe the last oil and gas giant find to be discovered. Namibia has become an oil exploration hotspot after several discoveries by oil majors including Shell and Total estimated at 2.6 billion barrels.
He added that large fields are economic to manage because the unit prices are low. Ruseckas is a specialist on gas markets, gas midstream, politics and policy
“There is no need for Namibia to do anything other than support this completely, work with the partners from the international oil and gas industry and move forward with that,” Ruseckas said when asked to comment on the fact that the discoveries come at a time when there is an energy transition from fossil fuels.
Despite the talk of energy transition, Ruseckas said Namibia should proceed and develop its oil fields because fossil fuels will still be in depend for a considerable period to come.
The S&P executive further cautioned that the country must develop a stable investment climate and not resort to change its investment terms too often.
“From the Namibian point of view you have to have a fair deal, something that brings in revenue for Namibia, have a local content and keep the terms stable, don’t change the investment terms; that drives investment away. You can’t change the terms a couple of years and try to squeeze more out of it.”
Ruseckas said the size of the discoveries are a positive development for the country, given its small population.
He said the revenue from the oil must be invested in a sovereign wealth fund for long term investments such as developing other industries.
“Start thinking about developing other industries that are going to be sustainable in a long term in Namibia. Mining is already a big industry, there can be more of that. The energy translation requires a lot of minerals and metals, some Namibia has,” said Ruseckas.
He warned that the oil discoveries should not mean that Namibia should abandon any ideas of taking advantages of its incredible solar and wind potential.
Regarding environment concerns about offshore oil production, Ruseckas said Namibia must establish rules and laws to govern the industry.
“You can look at what other countries have done and do that. The argest oil and gas companies are responsible operators. There is always going to be environmental opposition to offshore drilling because there are risks that come with that,” he said. He added that Namibia can emulate countries like Norway in ensuring that its offshore oil production does not destroy the environment.