• Market Watch

Namcor MD bemoans lowly 10% carry-free stake

• 2 Months Ago - 2024-10-16 00:00:00

Ebson Uanguta, interim managing director of the National Petroleum Corporation of Namibia (Namcor) said the entity's 10% carry-free interest is adequate for generating wealth for the state, but he acknowledged that the government could negotiate for a larger stake in its oil blocks.
Uanguta made the remarks during a briefing on the activities of the national oil and gas company, and said while it would have been desirable for Namcor to negotiate far bigger shareholding, it was not adequately capitalised to venture into oil and gas exploration.
“Of course we are not entirely happy with the 10%, and discovering an operation is an expensive exercise. Imagine, just to drill one well, it costs you about US$100 million or N$1.8 billion, and you are not sure whether you will get hydrocarbons,” Uanguta said.
“That will be like that N$1.8 billion that you have thrown into the water, so, that is why if we are looking for a bigger stake as an entity, if you do not have sufficient resources, we will not be able to explore. We will be sitting with blocks [in] which Namcor has 100%, and these blocks will be unexplored. You need that money,” he added.
Uanguta also defended Namcor’s limited participation in the exploration side of things, saying that despite drilling activities taking place since 1974, Namibia had seen limited success with regards to finding oil wells with the potential for considerable yields.
“Almost since 1974, there has been exploration, that exploration did not yield any results. The exploration that yielded results was the Kudu gas field."
Despite the government’s 10% stake through Namcor, Uanguta said Namibia still stood to benefit from its newly found oil resources. “If production starts, definitely that 10% will start bringing proceeds to Namcor, to the government and to the Namibian nation as a whole."