Namibia’s Cabinet Approves Upstream Local Content Policy, Marking a Turning Point for the Industry
As a strategic move for the industry, the Namibian Cabinet approved the National Upstream Local Content Policy. This progressive policy will focus on the development of local capabilities, playing a key role in reducing the country’s dependence on foreign expertise. The policy, which aims to strengthen economic sovereignty and empower Namibians in the country’s oil and gas industry, marks a turning point for the country as it aims to produce oil for the first time by 2029.
The African Energy Chamber (AEC), the voice of Africa’s energy industry, commends the Namibian government’s proactive stance on local content and its commitment to empowering local communities while maintaining an environment welcoming foreign investment. Clearly, the policy aims to balance the interests of local stakeholders with the needs of international oil companies, a model that other African countries could learn from.
Namibia is preparing to begin oil production from the Venus and Graaf discoveries in 2029, and the Mopane field could bring this production schedule closer. Since 2022, the country has made a series of major discoveries in the Orange Basin. These include Graff-1X, Venus-1X, Jonker-1X, Lesedi-1X and Mopane-1X, among others. International energy companies such as TotalEnergies, Shell and Galp Energias are leading the way, with Galp recently drilling Mopane-1A as part of a four-well evaluation campaign. Work is underway to finalize the final investment decision (FID) and production schedule, with FIDs for Venus-1X and Graff-1X expected to be completed by the end of 2024, enhancing the country’s growing oil potential.
With the recent surge, the government recognizes the urgency of maximizing the participation of local businesses, workforce and resources in the nation’s oil and gas industry. The National Upstream Petroleum Localization Policy aims to create a globally competitive supply chain while promoting domestic sustainable development, energy independence and technological expertise.
The policy addresses the unique challenges faced by Namibia’s upstream petroleum industry, which is capital-intensive, technology-driven and long-term dependent on high-risk investments. Traditionally, the industry has tended to have low levels of local employment and has relied heavily on imported goods and services. To address this, the policy aims to ensure that Namibian businesses and workers are fully integrated into the petroleum value chain, from exploration and production to service delivery and technology provision.
One of the key features of the policy is that it is aligned with Namibia’s wider development framework, such as the National Development Plan, Harambee Prosperity Plan and Vision 2030. These strategies emphasize the goal of an industrialized economy driven by Namibians, in which local expertise and resources play a central role. Through this policy, Namibia aims to encourage local companies to participate in procurement, manufacturing and service provision, ultimately ensuring that the benefits of the country’s oil and gas wealth remain within its borders.
As part of the scheme, oil operators will be required to submit detailed “local content plans” when applying for exploration and production licenses. The plans will outline the operator’s commitment to employing a local workforce, attracting local businesses to provide goods and services, and investing in the training and development of Namibian workers. The Ministry of Mines and Energy will monitor compliance and implementation to ensure policy objectives are achieved and maximize Namibia’s participation in the oil and gas industry.
The policy also emphasizes the importance of a stable and transparent regulatory environment, which will provide investors and operators with clear information while creating an atmosphere of trust and cooperation. By ensuring local content requirements are clear and enforceable, the policy aims to attract responsible investment, benefiting both oil companies and the Namibian people.
“With first oil production due to begin in 2029 and discoveries exceeding 11 billion barrels, implementation of this policy is critical,” said AEC Executive Chairman NJ Ayuk. “For the rest of Africa, this is how to leverage A strong example of oil and gas discoveries to drive long-term development, job creation and economic growth, as policies move towards implementation, the focus on local content, job creation and economic diversification is a testament to Namibia’s vision to become a key player in Africa’s energy sector. The people of Namibia are at the heart of this transformation.”
Distributed by APO Group on behalf of the African Energy Chamber.
