Oil industry won’t wait, Namibian firms warned

Namibian businesses must immediately step up their financial, regulatory, and technical game if they want a piece of the nation’s growing oil and gas pie.

This warning comes from Economic Association of Namibia (EAN) chairperson Jason Kasuto.

Speaking yesterday at the Namibia Oil and Gas Conference in Windhoek, Kasuto urged local entrepreneurs to stop waiting and start preparing, cautioning that global energy giants operate on strict international timelines.

“When the growth comes, it comes fast and it does not wait,” Kasuto said. “The contracts will be signed on schedules set in Paris and London.”

Namibian companies will have a competitive advantage as international oil companies set their local content policies.

The Cabinet approved Namibia’s local content policy for upstream petroleum on 4 August. The policy aims to promote Namibian ownership, participation, and financing.

But the oil companies can only contract companies that meet their standards.

“There is far more Namibian capability than the sceptics believe. [However,] capability is not readiness,” Kasuto said.

Companies require registration, certification, financial proof and insurance.

Kasuto urged Namibian companies to use the conference to speak to oil companies and find out what their standards are and how to reach those standards.

“These gaps are the difference between a good Namibian company and a contracted Namibian supplier,” he said.

He also said financing is available for these companies. Local suppliers need to make themselves attractive to that capital. “Become bankable. Finance follows paperwork, it does not follow your passion,” Kasuto said.

Nigerian Content Development and Monitoring Board executive secretary Felix Ogbe said during his keynote address yesterday that there are options for African countries to work together to improve local content.

There are existing capabilities in Africa across the upstream petroleum value chain, he said.

“If all these companies can come together and form a consortium and bid for projects together, it is possible to localise across Africa,” Ogbe said.

Africa has binding constraints, he said.

The African Free Trade Agreement could be the opportunity for free movement of goods and people across the continent, which will allow countries to work together to provide African services to the energy sectors.

According to Ogbe, Namibia should look at models for local content and partnerships across Africa. The country should also monitor local compliance.

“The message from Nigeria is that you should not see monitoring as just a compliance requirement. It is to measure to what extent the Orange Basin has transformed the Namibian economy,” he said.

During a morning masterclass yesterday, Nigerian energy services company Triumph said organisations like the Africa Local Content Organisation can advocate for equipment pooling and cross-border partnerships.

“We should stop operating in silos. There’s no need to re-invent the wheel. Let us partner with companies and countries that already have the capacity,” Triumph managing director Bolaji Ososami said.

“For the international oil companies, you will find out they have aggressive timelines on their projects. They want their projects delivered in time, with no variation on cost. You need to think about how you’re going to reconcile these pressures,” he said.

Ososami said Nigerian companies are willing to collaborate with Namibia to transfer skills and technology.