Business as usual for Namibia oil sector after president's death: analysts

The death of Namibian president Hage Geingob in office will not affect the country's rapidly emerging oil and gas sector, analysts told S&P Global Commodity Insights, with the ruling party expected to maintain a business-friendly approach to facilitate development of recent discoveries and further exploration.

Geingob died in the early hours of Feb. 4 aged 82, weeks after announcing a cancer diagnosis. Nangolo Mbumba, the vice president, takes over the oil, diamonds and lithium-rich country until elections can be held later this year.

"It is poignant and reassuring to note that today, even in this time of heavy loss, our nation remains calm and stable ...owing to [Geingob's] visionary leadership," Mbumba said.

A Namibian political titan, Geingob chaired the committee that drafted Namibia's constitution after independence from white minority-ruled South Africa in 1990 and served twice as prime minister. In 2014 he won the presidency before being narrowly re-elected in 2019.

After being sworn-in on Sunday, Mbumba said he had no plans to run in Namibia's upcoming elections, arresting fears of a power struggle in the country. Geingob's ruling South West Africa People's Organization had already picked as its candidate foreign affairs minister Netumbo Nandi-Ndaitwah, who will become Namibia's first female president if she wins.

SWAPO has ruled the country without interruption since independence.

Emerging oil sector

Geingob oversaw major oil discoveries by Shell and TotalEnergies in early 2022 which look set to make Namibia a significant oil producer and overhaul the country's economy. Drilling and exploration campaigns are in the works by several IOCs, while Shell and TotalEnergies are inching towards development of their projects.

Initial government estimates suggested the red-hot Orange Basin could contain 11 billion barrels of oil in place, although reserve estimates at Shell's Graff and Jonker projects were recently downgraded from 2.5 billion and 2.7 billion barrels to 200 million and 300 million barrels, respectively. S&P Global analysts expect Namibia's first oil to come in 2029.

Geingob made drafting local content requirements for the sector a key priority following the discoveries last year, but they are yet to become law. Still, analysts said his would not affect the country's emerging oil sector.

"President Geingob's death is unlikely to have a significant impact on oil and gas sector policy, particularly as the ruling party SWAPO is expected to remain in power following the 2024 elections," said Ida Hockerfelt, a senior research analyst at S&P Global. "While SWAPO has not yet presented its election manifesto, the government is likely to maintain its current business-friendly approach to facilitate development of the recent discoveries as well as promote further exploration."

Hockerfelt added, though, that "discussions will probably continue around the possible introduction of a minimum state participation level, where the opposition has pushed for over 50% carried interest." State-owned NAMCOR currently holds a 10% interest in most licenses.

Graham Hopwood, a senior analyst at Horizon Engage, said President Mbumba "seems intent on focusing on the priorities of the late president, who was his close colleague and friend."

Parliament will go into recess in the middle of the year to allow MPs to prepare for November's election, so there is little time to introduce legislation affecting the oil and gas industry, Hopwood said. However, "changes to petroleum legislation, including tax and royalty regimes, and a fully-fledged local content policy, are more likely to be introduced after a new president is sworn in on March 21, 2025," Hopwood added.

As well as overseeing Namibia's emergence as an oil and gas player, Geingob also sought to turn the country into a global green energy leader. In 2022, Namibia became the first African country to sign a green hydrogen supply agreement with the EU.