Backed by significant renewable energy potential, sizeable hydrocarbon discoveries in 2022 and new deals to explore green hydrogen development, Namibia is both ambitious and committed towards expanding the domestic energy sector to meet local and regional demand. In this regard, several developments across the entire energy value chain are leading the country into a new era of energy and economic growth.
Shell’s Graff-1 Discovery
In early February 2022, a sizeable discovery of light oil at the Graff-1 well offshore Namibia was made by the National Petroleum Corporation of Namibia (Namcor) in partnership with Shell Namibia Upstream B.V. and Qatar Energy. The Namibian government plans to fast-track the project for production to commence by 2026.
Orange Basin Discovery
In just a few weeks after Shell’s discovery, TotalEnergies made a significant discovery of light oil with associated gas on the Venus prospect in block 2913B of the Orange Basin. The discovery demonstrates the potential of Namibia’s frontier basins and is expected to usher in a new era of investment in the country.
Acquisition of Azinam by Eco Atlantic
With Namibia’s oil and gas market set for a boom, an increasing number of companies are looking to enter the market to explore and expand their production portfolio. In March 2022, Canada-based, Eco Atlantic, acquired E&P company, Azinam’s, entire offshore asset portfolio in Namibia including petroleum exploration licenses numbers 97, 98 and 99, a pivotal move to strengthen the company’s presence in the country.
ReconAfrica’s Participating Interest Expansion
Canadian exploration company, ReconAfrica, signed an agreement with Namcor to increase its participating interest in the Kavango Basin of the Okavango Wilderness region in Namibia. As a result, in April 2022, ReconAfrica announced that it will drill three exploration wells in the second half of the year. The deal is in line with the government’s vision to increase investments and the participation of foreign companies to boost exploration and production activities.
Gas Market Expansion and Workforce Development
Following the discoveries made by Shell and TotalEnergies in 2022, Namibia also seeks to push for local content development to further boost its gas market. As a result, in March 2022, Namcor entered into an agreement with Qatar Energy for the two to collaborate on the training and development of Namcor’s employees in industry-based skills.
Green Hydrogen Development
In November 2021, Windhoek-based firm, Hyphen Hydrogen Energy, was selected as the preferred bidder for the development of Namibia’s first green hydrogen project. Namibia will receive $6.3 million in concessional fees from the developer in 2022 which will be used to help the country deliver its green hydrogen strategy to unlock greater investments within the sector and ensure the increased use of the energy resource for economic development and energy poverty reduction.
Khan Solar Project
The Namibia Power Corporation (NamPower) has also embarked on a deal with Namibian independent power producer, Access Aussenkehr Solar One Namibia, to develop the $20.6 million Khan solar project in Erongo province, thereby diversifying the country’s energy mix. The project will comprise 33,000 solar panels, 100 inverters and will supply electricity to 18,500 households as part of a 25-year power purchase agreement.
NamPower Omburu Storage Project
A $22 million grant secured by NamPower from German Development Agency, KfW, is being used to develop an energy storage system in Omburu – south-east of Omaruru town – which the utility will use to store electricity during off-peak periods for use during peak periods to reduce outages on the grid. The system will be critical for improving energy reliability and offsetting intermittency challenges associated with renewables.
Namibia-Zambia Energy Deal
NamPower signed a deal with Zambian state-utility, Zesco, in April 2022 whereby Zambia will export up to 80 MW of electricity to meet growing energy demands in Namibia. The deal has increased Zesco’s energy exports to Namcor to the tune of 180 MW while further solidifying the already strong regional partnership.
Development of Sekelduin Substation
The modernization of the country’s existing infrastructure is also top priority to ensure energy reliability with NamPower kickstarting a $12.2 million initiative in this regard. The initiative will see a new 132/66/33kV indoor substation built in the Erongo region (western Namibia) together with two overhead transmission lines as well as power transformers and automation and control systems through to 2024.