The Namibian government and French company TotalEnergies are engaged in ongoing talks over the country's first major offshore oil project. According to sources familiar with the negotiations, discussions are centered around several key issues, including the licence period, international arbitration, taxation, and the new petroleum law. These talks have been ongoing for several years since the 2022 discovery of oil at the Venus prospect.
A major point of contention in the negotiations is reportedly the stabilisation clause, which prevents Namibia from changing laws that affect the investment deal. Sources claim that this clause, along with other issues, is delaying Total's final investment decision (FID). TotalEnergies has declined to comment on the specifics of the negotiations, stating only that they remain committed to working constructively with the Namibian authorities.
The Namibian government is pushing for the urgent passage of the proposed petroleum (exploration and production) amendment bill, which aims to transfer powers from the industries, mines and energy minister to the President's office. The legislation seeks to manage the country's fast-developing upstream petroleum sector. However, as the bill has not been passed by parliament, TotalEnergies is negotiating under the existing Petroleum (Exploration and Production) Act, 1991.
President Netumbo Nandi-Ndaitwah has emphasized the need for the petroleum bill to be passed, allowing her to take charge when the FID is issued. A source familiar with the negotiations suggests that the government is concerned about setting a precedent by giving TotalEnergies special treatment, which could prompt other companies to seek similar concessions.
TotalEnergies chief executive Patrick Pouyanné has stated that the company is making progress in discussions with the Namibian government. He emphasized the need to protect the project, citing its good returns on high oil prices and the need for protection at lower prices. Pouyanné also announced that peak production at the Venus project would be 160,000 barrels of oil per day, an increase from the previously announced 150,000 barrels.
Namibian officials have questioned why TotalEnergies presented them with a financial model using the lower production number, sparking concerns about the company's transparency regarding its financials. Pouyanné visited Namibia on September 10, meeting with State House officials in a private meeting described as "just a pit stop" by insiders.
The ongoing negotiations highlight the complexities of managing the country's emerging oil sector. With the petroleum bill awaiting passage and key issues still to be resolved, the outcome of the talks between the Namibian government and TotalEnergies remains uncertain. The two parties are expected to reach an agreement, which will be officially communicated once finalized.
Key points
- TotalEnergies and Namibia in talks over Venus offshore oil project
- Disagreements over licence period, taxation, and petroleum law delay FID
- Peak production at Venus project expected to reach 160,000 barrels per day
