The former interim managing director of Namcor, Ebson Uanguta, has said Namibia is not limited to a 10% interest in several offshore blocs that it owns.
Speaking on the 1ON1 programme, Uanguta said that Namibia can go up to 67% when it comes to interest as opposed to its regular 10% in oil exploration deals.
"There are 2 primary sources: 1st, Namcor could be given a petroleum exploration licence by the ministry; it could be 100% or 90%, and then with any other partner, that's the first one. The 2nd one is when an exploration licence is granted to any other player or operator, and Namcor, by virtue of being the national oil company – there is also another provision which was a Cabinet decision that in all exploration licences that are going to be granted – at least Namcor should have a stake of 10%."
Oil exploration and production come with inherent risks, with the costs of exploration being high and there being no guarantee of success, bringing about financial strain in a company that is already financially stretched.
In the Chevron deal of PEL 82 in the Walvis Basin offshore Namibia, both Custos Energy and Namcor retained a 10% interest.
However, he added that the state-owned entity didn't have to pay for costs if there was no commercial viability.
"That 10% equity of Namcor is free carry; in other words, when you are free carry, you don't spend anything on exploration. Exploration is such a very expensive exercise. In just drilling one well, it will cost you 10 million US dollars."
Although Namcor, along with other key shareholders, partnered with Shell in the PEL 39 oil block, whereby Shell last year cited technical and geological challenges encountered, leading to a write-down of 400 million US dollars, Uanguta said that does not mean there is no hope.
"It has been found that they may not be commercially viable, but that does not really write off that there are no deposits of hydrocarbons in those wells. When we talk about explorations, we are talking about huge acreages; now, drilling could only be taking place in a tiny portion of that acreage."
The current Deputy Governor of the Bank of Namibia was in charge of Namcor from January 2024 to the end of last month.
He has since been replaced by Victoria Sibeya, who is the acting managing director of Namcor effective from the 1st of this month.