Following the
exit of Angola from the Organisation of Petroleum Exporting Countries (OPEC), through
its alliance, the OPEC+, is eyeing Namibia for possible membership as it sets
up what could be Africa’s fourth-largest output by the next decade.
Quoting an
African industry official and other sources, Reuters reports that TotalEnergies
(TTEF.PA) and Shell (SHEL.L), in recent years, have made discoveries estimated
at 2.6 billion barrels, setting the stage for the Namibia to plan production from
about 2030.
According to
Reuters, its sources explained that the initial focus for OPEC+ would be to see
Namibia join its Charter of Cooperation, a grouping that engages in longer-term
dialogue about energy markets. Brazil joined the charter in January.
Eventually OPEC,
the core oil exporters group that with Russia and others forms OPEC+, would
like to see Namibia become a full member, said NJ Ayuk, executive chairman of
the African Energy Chamber, which he said had been involved in facilitating
talks between the two sides.
OPEC has begun
its "charm offensive", he said, adding that the outcome of the talks
were unclear at this stage.
OPEC did not
immediately respond to a request for comment. OPEC Secretary-general Haitham Al
Ghais was quoted in February as saying OPEC was holding talks with several
nations on joining the charter, without naming them.
OPEC in a tweet
at the time said Al Ghais met Namibian Minister of Mines and Energy Tom
Alweendo at a conference in Nigeria where the prospect of OPEC and Namibia
working together "under the umbrella of the charter of cooperation"
was raised.
Last year, Namibian
Petroleum Commissioner Maggy Shino expressed interest in joining the OPEC
"family", according to a report by S&P Commodity Insights, known
as Platts.
Yet in March,
minister Alweendo told Reuters that OPEC membership was not on the cards and
did not want to be drawn on whether Namibia was considering joining the
charter.
"We haven't
been approached by anyone to join OPEC. OPEC members are petroleum exporting
countries and we are not there yet," he said. "That is a
consideration only after we have started to produce."
Talks between
OPEC and the Namibian government will likely continue in late April, however,
when OPEC's Al Ghais is scheduled to deliver an address to a Namibian energy
conference, said Ayuk, who is also a speaker at the event.
About 2.6
billion barrels of oil have been discovered in Namibia this decade so far,
Pranav Joshi of energy consultancy Rystad Energy told Reuters.
In addition to
Total and Shell, firms including Chevron (CVX.N), Rhino Resources, Eco Atlantic
Oil & Gas and Galp Energia (GALP.LS) are conducting exploration and
appraisal activities.
Based on the
existing discoveries, Namibia is looking at 700,000 barrels per day (bpd) of
peak production capacity by the next decade, Joshi estimated.
That is smaller
than Angola's output of some 1.1 million bpd but Joshi noted Namibia's number
could rise with further successful exploration.
Angola quit OPEC
last December over a lower-than-expected output ceiling it received from OPEC+
whose members are curbing production to help support prices.
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