Pan-African Group Joins Oil Search

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By Surihe Gaomas WINDHOEK Marking the first ever Pan-African petroleum exploration licence awarded in Namibia, the Ministry of Mines and Energy recently issued a licence that deals with a purely Pan-African business venture between Namibian and South African entrepreneurs. Officially handing over the licence in the capital last Friday, the Minister of Mines and Energy, Errki Nghimtina, said this was a significant step in the right direction, because for the past twelve months the licences were only granted to international oil companies. Through the latest venture, Industrial Development Group (IDG), the leading South African black investment group in oil and gas acquired 70 percent in Block 2815 from the Ministry of Mines with the other balance being held by Cumoxi Investment and Knowledge Resources, Namibian black economic empowerment entities. Namibia Industrial Development Group (Namibia IDG) is the vehicle through which this exploration licence will be held for a period of four years. The 15 000-square kilometre area in the Orange Basin will be the target area for the group’s oil and gas exploration. The agreement includes the onshore blocks 2815 and 2195 straddling the border with South Africa and Namibia, and the offshore Block 2816. The petroleum agreement between Namibia IDG and the Namibian government marks the 13th exploration licence issued by the Ministry of Mines since August last year. Since 2005, there has been a huge exploration interest by international oil companies, making Namibia a “hot destination for oil exploration”, noted Permanent Secretary of Mines and Energy Joseph Iita, who was also present at the signing ceremony. Some of the factors that make Namibia the best place for such ventures are the country’s competitive fiscal terms, its favourable investment climate and the current favourable oil prices on the international market. Nghimtina noted that it was against this background that both the South African and Namibian entrepreneurs were entering a “highly risk and capital intensive industry” that so far has been dominated by international oil companies. “They are entering a tough industry with high barriers to entry… you are active in several other African countries and have sufficient financial and technical capacity at your disposal to explore your block,” said Nghimtina. Although other companies like Chevron have drilled a well at the Orange Basin around Block 2815 in the last decade and the area is also close to the Kudu gas field, he is optimistic that there are good prospects for oil and gas. Speaking at the same occasion, IDG Group Chairperson Mxolisi Mbetse pointed out that it was not the first time for IDG to enter the oil and gas sector as the Group had already secured their first exploration licence back in 2002. Mbetse said due to the natural gas shortage, the issue is becoming problematic in South Africa. “South Africa is likely to run out of gas around 2012 so we must secure resources,” he told reporters, adding that the latest venture is ideal in showing that Africans can find solutions for themselves. Recent months have seen Namibia award several gas and oil exploration licences, mainly offshore. These include licences to BHP Billiton, Hunt Oil, First African Oil Corporation and INA Industrija from Croatia.