Significance of Namibia’s first oil discovery – Expert

By Nneka Nwogwugwu

Frank Fannon, former United States Assistant Secretary of State for Energy Resources and current Managing Director of Fannon Global Advisors has explained the significance of Namibia’s oil discovery.

In an interview with the African Energy Chamber, Fannon said that the discovery is a game changer for the country – Namibia’s first oil discovery.

Namibia has had 40 plus years of uneconomic or dry holes since the Kudu gas field discovery in 1974. Shell’s Graff-1 confirms to the global industry that Namibia has the resources to attract the world’s best and brightest.

Giving advice to Namibia on how to handle exploration and production of the discovery, he said: “With a discovery of this potential significance, there are often political voices that would like to start spending money and accelerate timelines or cut corners to meet political rather than business cycles.

“I would encourage the country to stay on a disciplined path. To focus on the technical elements, safety, and environmental performance, among others. The world, investors, and the broader industries are watching how Namibia manages this discovery. It will be important that the country and the private sector execute the plan.”

He noted that the discovery will mean a lot to local content.

“It is appropriate to encourage local content especially where that content can add real value to the enterprise.

“In practice, the best application of local content is when there is clear alignment between the local business or workforce and the project.

At the discovery stage, there is likely little opportunity for local content since there is still more of a design phase.

However, I would expect that there would be more opportunity for local content as the onshore services will be required when the project advances,” he said.

Speaking on the environmental impact, he said, “High oil and gas prices have underscored that we will need oil and natural gas for many years into the future. The transition away from oil will take many decades, and it will be uneven with certain regions able to transition sooner than others.

“ Yet, increasing calls to address climate change and transition away from hydrocarbons are very real. The market, investors, shareholders, and the public more broadly, will increasingly demand that those hydrocarbons be produced safely and environmentally sustainable.

“ I suspect that concepts align with most Namibians, particularly given the importance of tourism. It will be important for Namibia or any other project in the world to demonstrate that it is operating with the environment in mind and with the highest standards.”