NPC backs oil-backed development funding

Namibia should borrow against its anticipated future oil and gas revenues to fund development projects now, rather than wait for production to begin, National Planning Commission director general Kaire Mbuende has said.

Mbuende made the remarks during stakeholder engagements in the Oshana Region, telling attendees the question was no longer whether Namibia would benefit from its oil and gas resources, but when.

"The promise of oil and gas, we thought it would be a short time, it will come on stream fast, but it is taking a bit too long," he said. "My intention, and I spoke to my colleague from finance, was to say, since we are going to get money from oil and gas, why don't we spend that money because we cannot delay development."

Mbuende said Namibia was on course to become a trillion dollar economy once oil production began, a prospect he argued gave the country room to borrow against wealth still to come.

"You can spend today and of course reimburse it, or pay it back with the money that is coming," he said. "When it comes on stream, we will become a trillion dollar economy, but that is only in the next five years or so."

Timelines under pressure

Mbuende's proposal comes against a backdrop of slower-than-expected progress in Namibia's offshore sector. Under its Sixth National Development Plan, Namibia has set a target of producing 150 million barrels of oil equivalent by 2030, a goal that would require close to 205,000 barrels a day once output begins, given no production is expected before 2029.

That target came under strain last year when Shell wrote down US$400 million (about N$7.4 billion) on its Graff and Jonker discoveries in the Orange Basin, concluding the fields were not commercially viable due to low-permeability reservoirs and high gas content that would require costly reinjection or processing infrastructure.

With Shell's exit, TotalEnergies' Venus project has become the clearest route to first oil, with a final investment decision expected by the end of the fourth quarter of 2026 and production targeted for 2029. Galp Energia's Mopane discovery is regarded as a second promising prospect, though the company has yet to commit to a development timeline. Venus alone is estimated to require between US$15 billion and US$20 billion in capital expenditure.

Analysts have pointed to countries such as Guyana, where production scaled up within four years of discovery, as evidence that rapid development is achievable, though they note Guyana's progress was underpinned by stable fiscal terms and multiple operators working in parallel, conditions Namibia has yet to establish with a single lead project.

The government has projected that the oil sector could create up to 2,800 direct jobs, rising to 22,800 once multiplier effects are included, though economists have cautioned that reliance on a single operator nearing a final investment decision could make those targets harder to reach on schedule.

-additional reporting by Extractor Magazine