Namibia is experiencing a surge in investment due to recent oil discoveries, driving growth in its fossil fuels sector. The country is not only focusing on oil and gas exploration but has also secured significant funding from the EU for its renewable energy initiatives, particularly green hydrogen. While this rapid investment could position Namibia as a key hub for both fossil fuels and renewable energy, the energy minister has stated that the nation will not rush to reach net-zero carbon emissions.
Several major oil companies are actively investing in exploration in Namibia after discovering substantial crude reserves. TotalEnergies and Shell estimate they have found around 2.6 billion barrels of crude and plan to start production by the end of the decade. Discoveries in the Orange Basin, along with the Luderitz, Kavango, and Walvis basins, are attracting more companies to the region. Chevron is set to begin exploration this year after securing an 80 percent operating interest in an offshore block in the Walvis Basin. Additionally, Eni and BP’s joint venture Azule Energy will collaborate with Rhino Resources Namibia in the Orange Basin. Galp has completed the first phase of exploration on its Mopane-1X and Mopane-2X wells, estimating that the Mopane field could contain over 10 billion barrels of crude. So far, 12 oil majors have expressed interest in Namibia’s oil resources.
At the start of the year, TotalEnergies acquired an additional 10.5 percent interest in Block 2913B and a 9.39 percent interest in Block 2912 in the Orange Basin. The company plans to allocate about 30 percent of its $1 billion exploration budget to Namibia this year. TotalEnergies, which has operated in Namibia since 1964, aims to begin production from the Venus 1-X well in Block 2913B, estimated to hold 5.2 billion barrels of oil, by around 2029.
Despite its current debt exceeding 60 percent of GDP, analysts view Namibia’s economy as stable due to its recent oil discoveries and energy sector growth. The country already benefits from a robust mineral export industry, including diamonds and rare earths. As investment in crude reserves increases, the energy sector could surpass mining as the primary economic driver. Charlie Robertson, head of macro strategy at FIM Partners, noted, “Oil exports per capita out of Namibia will resemble a Gulf state in the 2040s, provided they remain competitive globally… which should positively impact the country’s debt-to-GDP ratios.”
Alongside its fossil fuel development, Namibia is also working to enhance its renewable energy capacity. In September, the European Commission announced substantial funding to support clean hydrogen and renewable power projects. The EU has pledged $55.1 million for green hydrogen initiatives in Namibia and South Africa, focusing on production, transportation, and storage. Additionally, $3 million will be allocated to Namibia’s Mines and Energy Ministry to expand renewable generation and improve access in remote areas. A separate agreement from Germany and the Netherlands will provide $1.3 million to support the Namibia Green Hydrogen Programme, ensuring effective regulation of the sector.
Despite these positive developments, Namibia’s Energy Minister Tom Alweendo has criticized calls from the Global North for a swift green transition. He emphasized the importance of oil and gas revenues for industrialization and poverty alleviation. This perspective resonates with other African nations, like Ghana, that view oil and gas exploitation as crucial for economic development. Nonetheless, increased investment in Namibia’s renewable energy sector will help diversify its energy mix and enhance energy security in the coming decades.
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