WEBVTT - Could Namibia See The World's Last Oil Rush? 0:00:02.440 --> 0:00:06.760 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.760 --> 0:00:13.280 It could be Africa's next big oil rush. Discoveries off 0:00:13.320 --> 0:00:16.040 the shores of Namibia could propel it to be one 0:00:16.079 --> 0:00:18.200 of the world's major producers. 0:00:18.560 --> 0:00:22.360 If you multiply that by today's oil price, it's roughly 0:00:22.440 --> 0:00:25.560 a trillion dollars. There's another discovery that was made that 0:00:25.640 --> 0:00:27.040 could be ten billion barrels. 0:00:27.240 --> 0:00:31.000 Global energy titans are desperate to capitalize on the discoveries, 0:00:31.080 --> 0:00:35.680 with French multinational Total Energies hoping to start development on 0:00:35.840 --> 0:00:38.960 the Venus oil field as early as this year, and 0:00:39.000 --> 0:00:40.639 they aren't the only ones excited. 0:00:40.800 --> 0:00:43.519 We've read it one well in Namibia so well, you know, 0:00:43.560 --> 0:00:45.599 in our industry, we know that we need to appraise 0:00:45.680 --> 0:00:46.680 and to continue. 0:00:46.960 --> 0:00:49.720 It seems that the discovery might be giant. 0:00:50.000 --> 0:00:53.600 Well, certainly a basin that has seen some early exploration 0:00:53.960 --> 0:00:57.600 success by others. We've got one large block off Namibia 0:00:57.680 --> 0:01:00.600 that we expect to put on an exploration down in 0:01:00.760 --> 0:01:02.400 late this year or early next year. 0:01:02.520 --> 0:01:04.839 To give you a sense of our belief in Namibia, 0:01:05.520 --> 0:01:09.080 roughly a quarter of our deep water expiration spend in 0:01:09.120 --> 0:01:12.720 twenty twenty three and twenty twenty four will be directed 0:01:12.720 --> 0:01:16.120 to Namibia. So it is a theater that we fundamentally 0:01:16.120 --> 0:01:16.840 believe in. 0:01:17.280 --> 0:01:20.360 But as the world starts to wean itself off of oil, 0:01:21.160 --> 0:01:24.440 is there actually time for Namibians to benefit from the discovery? 0:01:24.959 --> 0:01:28.160 And could the rush fade away just as quickly as 0:01:28.200 --> 0:01:28.880 it arrived. 0:01:30.959 --> 0:01:32.880 I'm Jennifer's Abasaja. 0:01:32.480 --> 0:01:35.640 And this is the Next Africa Podcast, bringing you one 0:01:35.680 --> 0:01:38.560 story each week from the continent driving the future of 0:01:38.600 --> 0:01:45.440 global growth, but the context only Bloomberg can provide. Bloomberg's 0:01:45.520 --> 0:01:49.240 Paul Burkhardt has been watching the developments closely. His story 0:01:49.400 --> 0:01:52.559 is out now and he's joining us to talk through it. Hey, Paul, 0:01:52.680 --> 0:01:55.520 thanks so much for joining us. So let's just dig 0:01:55.560 --> 0:01:58.160 through this story because you've been taking a look at 0:01:58.160 --> 0:02:01.240 this in particular in Namibia. Yeah, and really what the 0:02:01.280 --> 0:02:05.960 implications are for the country. How big of a deal 0:02:06.080 --> 0:02:09.480 could this be for the country if there were to 0:02:09.560 --> 0:02:12.720 be a massive discovery. As you sort of allude to 0:02:13.000 --> 0:02:14.080 in your story. 0:02:15.040 --> 0:02:17.360 There's been a search for oil offshore in the MAYBEA 0:02:17.440 --> 0:02:19.720 for a long time. I was there, I think about 0:02:19.800 --> 0:02:23.119 ten years ago when I first moved to the continent, 0:02:23.280 --> 0:02:26.200 and there were a number of explorers that were out there, 0:02:26.200 --> 0:02:30.680 but Finally, in twenty twenty two, Shell and Hotel both 0:02:30.760 --> 0:02:35.440 made discoveries there and they've seen rough estimates holding as 0:02:35.520 --> 0:02:39.600 much as eleven billion barrels. So the fuzzy math is 0:02:39.720 --> 0:02:43.560 if you multiply that by today's oil price, it's roughly 0:02:43.639 --> 0:02:46.760 a trillion dollars. There's another discovery that was made that 0:02:46.840 --> 0:02:50.239 could be ten billion barrels. So again you kind of 0:02:50.280 --> 0:02:52.919 have to note that none of this has been deemed 0:02:52.919 --> 0:02:55.200 commercial yet. The oil might be there, but you have 0:02:55.280 --> 0:02:57.960 to figure out how to get it out. To put 0:02:58.000 --> 0:03:03.359 it into context, Nigeria, that's been Africa's biggest producer, has 0:03:03.440 --> 0:03:07.360 proven reserves of about thirty seven billion barrels. Just to 0:03:07.360 --> 0:03:10.000 get to the numbers that we're talking about right now 0:03:10.120 --> 0:03:13.280 really gives you a sense of scale. Opek is even 0:03:13.320 --> 0:03:18.919 courting the government and could double triple GDP, so it's enormous. 0:03:18.919 --> 0:03:20.320 It could really change things there. 0:03:20.639 --> 0:03:24.480 And so we've heard Totel discuss the fact that they 0:03:24.680 --> 0:03:27.080 plan to start work on this as early as the 0:03:27.240 --> 0:03:30.919 end of twenty twenty four. How quickly are are they 0:03:30.960 --> 0:03:34.240 moving on this, because I imagine there's quite a process 0:03:34.280 --> 0:03:37.640 to actually get things going and actually see the benefits 0:03:37.640 --> 0:03:37.920 of this. 0:03:38.720 --> 0:03:41.360 Yeah, there's Shell also has things planned. 0:03:41.400 --> 0:03:44.480 Totel seems to be a little ahead in the schedule, 0:03:44.960 --> 0:03:48.360 and overall there's really like kind of a gold rush 0:03:48.440 --> 0:03:52.880 that's going on. The Portuguese explorer GALP they made the 0:03:52.920 --> 0:03:57.760 other discovery, Chevron's bought into some of the blocks, and 0:03:57.840 --> 0:03:59.960 the other big oil companies that don't have a football 0:04:00.160 --> 0:04:02.760 yet they're going to be looking to buy into these 0:04:02.880 --> 0:04:07.920 areas offshore. So we've reported sources saying Exxon has interest 0:04:08.000 --> 0:04:11.240 in the Gallop discovery. Just about every big oil company 0:04:11.680 --> 0:04:14.400 is looking in the Orange Basin where they've struck oil. 0:04:14.800 --> 0:04:16.080 Things are moving quite quickly. 0:04:16.160 --> 0:04:19.000 How is it actually working on the ground, Paul, from 0:04:19.000 --> 0:04:21.279 your understanding, especially when you think about all the players 0:04:21.279 --> 0:04:23.360 that are now rushing in. 0:04:23.880 --> 0:04:26.719 Well, you know, the oil companies are racing against the 0:04:26.960 --> 0:04:29.239 energy transition really, which would. 0:04:29.120 --> 0:04:30.679 Bring on lower demand for oil. 0:04:30.760 --> 0:04:34.080 So as you're using cleaner sources of energy, you're using 0:04:34.160 --> 0:04:37.880 less oil that will start to dent this like one 0:04:37.960 --> 0:04:42.120 hundred million barrels a day that's consumed now, that'll start 0:04:42.160 --> 0:04:44.159 to go down. The value of crude will start to 0:04:44.200 --> 0:04:47.200 go down. These the oil companies aren't denial about that, 0:04:47.440 --> 0:04:51.599 but they want to develop these big discoveries, like really 0:04:51.680 --> 0:04:55.359 quickly before that really drops off. The pace we're seeing 0:04:55.400 --> 0:04:58.520 is unprecedented a lot of ways. So when I was 0:04:58.560 --> 0:05:02.000 in Wallas Bay last which is just on the coast, 0:05:02.400 --> 0:05:06.360 I could see oil equipment on the pier, people workers 0:05:06.400 --> 0:05:09.640 with coveralls that are marked with like schlumber Jay, one 0:05:09.680 --> 0:05:12.960 of the oil service companies. See those in town, and 0:05:13.000 --> 0:05:17.239 so it's happening. You hear officials talking about people wanting, 0:05:17.279 --> 0:05:22.360 companies wanting land, and there's really activity brewing. It's really 0:05:22.400 --> 0:05:23.839 poised to start. 0:05:23.960 --> 0:05:26.360 And you mentioned officials there, Paul, I mean you've been 0:05:26.360 --> 0:05:29.440 speaking to officials on the ground there. What are they saying. 0:05:29.480 --> 0:05:31.640 Is anyone optimistic potentially about this? 0:05:32.520 --> 0:05:36.520 I think yeah, they're optimistic, but they're also kind of cautious. Again, 0:05:37.600 --> 0:05:41.039 the oil industry being really specialized. 0:05:41.080 --> 0:05:42.400 I think the governor of. 0:05:42.360 --> 0:05:47.200 The area where the main harbor is said, we need 0:05:47.240 --> 0:05:49.680 to build skills and we just we need to train 0:05:49.760 --> 0:05:53.240 people up to be able to participate in this. The mayor, 0:05:53.600 --> 0:05:59.200 Trevino Forbes of Walvis Bay has talked about companies requesting land, 0:05:59.440 --> 0:06:03.080 things that I've never encountered much of in the past. 0:06:03.320 --> 0:06:05.480 When as a local authority We have received a lot 0:06:05.480 --> 0:06:08.000 of interest for people trying to acquire an end for 0:06:08.400 --> 0:06:11.520 storage facilities, and there is something that you're also looking at. 0:06:11.520 --> 0:06:15.360 But it's very difficult, you know, when you we can't 0:06:15.400 --> 0:06:17.200 continue operating in the way we operate in. 0:06:17.279 --> 0:06:20.479 I think there's still some skepticism about it, what will 0:06:20.520 --> 0:06:23.760 happen because there was a gas discovery that was made 0:06:23.800 --> 0:06:26.520 in the seventies some people in Namibia. I've spoken to 0:06:27.200 --> 0:06:30.640 Namibians on my trips there who mentioned this and they said, oh, 0:06:30.680 --> 0:06:34.360 nothing happened, So there's always going to be people will 0:06:34.360 --> 0:06:37.000 believe it when they can see it. Another thing that 0:06:37.240 --> 0:06:41.520 very close by that people have watched happen is Angola 0:06:41.600 --> 0:06:42.720 is a neighbor of Namibia. 0:06:43.160 --> 0:06:44.960 Everyone there has watched. 0:06:44.960 --> 0:06:47.880 How you know, the oil did kind of very little 0:06:47.920 --> 0:06:51.440 to boost livelihoods of most people on the ground, and 0:06:51.920 --> 0:06:56.040 already even the state oil company, Namcore has had some. 0:06:55.960 --> 0:06:57.720 Weirdness and arrests. 0:06:57.839 --> 0:07:03.440 There was a suspended official there because potential corruption and 0:07:03.680 --> 0:07:06.719 trying to clean that out. But there's still just the 0:07:06.839 --> 0:07:09.720 warning signs and there's some apprehension about it too. 0:07:09.760 --> 0:07:13.040 Of course, Paul, you're sticking with us and when we 0:07:13.120 --> 0:07:15.960 come back, we're going to ask whether this is actually 0:07:16.000 --> 0:07:19.400 a long term investment for Namibia, as you mentioned, potentially 0:07:19.400 --> 0:07:22.760 a risky one, especially if we think about where the 0:07:22.760 --> 0:07:25.600 world is right now starting to turn away from oil. 0:07:26.080 --> 0:07:31.160 We'll be right back, all right, welcome back. 0:07:31.280 --> 0:07:34.720 Paul is still with us here and we're talking through 0:07:35.120 --> 0:07:38.680 Namibia's oil rush. But if you think about where the 0:07:38.720 --> 0:07:42.120 world is at this time, some might wonder whether or 0:07:42.160 --> 0:07:44.720 not this is the opportune time to actually go all 0:07:44.760 --> 0:07:48.160 in on oil. We've seen governments across the world looking 0:07:48.200 --> 0:07:51.240 to reduce demand for oil as they try to tackle 0:07:51.560 --> 0:07:52.560 climate change or have. 0:07:52.560 --> 0:07:53.480 Some impact in it. 0:07:53.840 --> 0:07:57.760 So, Paul, you were mentioning this long term plan investment 0:07:57.960 --> 0:08:02.640 for the country, is is it risky considering where we're 0:08:02.680 --> 0:08:04.280 at right now in twenty twenty four. 0:08:04.680 --> 0:08:08.440 Of course, anything any major projects is subject to delays. 0:08:08.720 --> 0:08:14.360 Namibia's government is regarded as relatively stable, so comparatively on 0:08:14.400 --> 0:08:17.840 the continent there might not be as much risk versus 0:08:17.880 --> 0:08:21.160 other places with a lot of natural resources. But what 0:08:21.240 --> 0:08:24.880 we see even Senegal now we're seeing oil output there, 0:08:24.920 --> 0:08:29.200 but that project and another big one for liquefied natural gas, 0:08:29.240 --> 0:08:32.960 has had timelines extended more than once. So this is 0:08:33.000 --> 0:08:35.520 just the nature of a lot of these countries where 0:08:35.520 --> 0:08:37.040 there isn't a lot of infrastructure. 0:08:39.240 --> 0:08:41.560 As you see these projects fall. 0:08:41.400 --> 0:08:45.679 Behind or they're more and more delays, then there's going 0:08:45.720 --> 0:08:48.160 to be more of a problem with sort of meeting 0:08:48.480 --> 0:08:52.680 like a real healthy market for oil. So yes, there's 0:08:52.880 --> 0:08:56.760 an increasing risk for that. One of the things that 0:08:56.800 --> 0:09:00.920 we hear from a lot more often from African nations 0:09:01.160 --> 0:09:03.440 is this is the twist because they want to produce 0:09:03.480 --> 0:09:07.920 their own natural resources. Africa as a continent, it's only 0:09:08.000 --> 0:09:12.240 missions footprint is relatively small in comparison to the US 0:09:12.320 --> 0:09:16.720 or Europe or China. So they're saying, it's our time 0:09:16.880 --> 0:09:20.679 to produce this oil and gas and don't tell us 0:09:20.679 --> 0:09:24.240 what to do. So there's a real there's a willingness, 0:09:24.320 --> 0:09:28.760 and I think that's why Namibia also has like relatively 0:09:28.960 --> 0:09:33.040 good terms for oil companies to operate in and so 0:09:33.120 --> 0:09:36.800 that makes them even more attractive other than the resource itself. 0:09:37.160 --> 0:09:38.800 Yeah, that comes up a lot, Paul. 0:09:38.840 --> 0:09:42.960 I've noticed during COPP during the Climate Change conference. That 0:09:43.000 --> 0:09:46.560 happens every year, especially when you hear African leaders saying, 0:09:46.720 --> 0:09:48.520 you know, you need to consider the place at which 0:09:48.960 --> 0:09:50.320 the continent is at. 0:09:50.559 --> 0:09:52.559 When we think about the transition. 0:09:52.760 --> 0:09:57.000 I mean when we hear from other campaigners or environmentalists, 0:09:57.120 --> 0:10:01.280 are they receptive? I mean, are they understand that there 0:10:01.400 --> 0:10:04.640 is still development and you know, energy that is needed 0:10:04.640 --> 0:10:06.760 on the continent or do they push back? 0:10:06.760 --> 0:10:08.199 Would you say yeah, I. 0:10:08.120 --> 0:10:09.640 Think you get a range of answers. 0:10:09.840 --> 0:10:13.760 It's difficult argument to make for especially for environmental groups 0:10:13.800 --> 0:10:16.720 that want to end the use of fossil fuels, and 0:10:16.760 --> 0:10:21.360 certainly they don't want to see that developed off their coastline. 0:10:21.800 --> 0:10:26.800 In Namibia itself, it has a relatively small NGO sector, 0:10:27.320 --> 0:10:29.880 just because the population is just I think two point 0:10:29.920 --> 0:10:33.040 seven million or something like that proportionately that there aren't 0:10:33.040 --> 0:10:37.320 as many groups that would be potentially be resisting this. 0:10:37.800 --> 0:10:41.400 There has been resistance to an onshore oil campaign that 0:10:41.720 --> 0:10:45.320 came earlier because it's in a very ecologically sensitive area. 0:10:45.440 --> 0:10:49.040 We haven't seen an orchestrated campaign on the offshore projects 0:10:49.080 --> 0:10:51.320 in the way that we have seen the same in 0:10:51.400 --> 0:10:52.120 South Africa. 0:10:52.320 --> 0:10:54.359 But you know, don't know that could change. 0:10:54.520 --> 0:10:58.280 And is it safe to call this the last big 0:10:58.320 --> 0:10:59.240 oil rush poll? 0:10:59.440 --> 0:11:02.120 Is that too dramatic of a term? 0:11:02.160 --> 0:11:04.120 I mean, I wonder sort of how you place this 0:11:04.280 --> 0:11:06.720 against what else we're seeing across the continent. 0:11:06.760 --> 0:11:09.800 As you were mentioning, yeah, I think from the look 0:11:09.880 --> 0:11:12.040 of things now, I would say yes, there are some 0:11:12.160 --> 0:11:14.400 other prospects in West Africa, North Africa. 0:11:14.440 --> 0:11:17.000 There's some significant discoveries. 0:11:16.400 --> 0:11:20.800 In Ivory Coast where we've seen like really record developments. 0:11:20.920 --> 0:11:23.960 The Italian explorer any It did like a. 0:11:24.080 --> 0:11:26.760 Really quick time I think a couple of years between 0:11:27.200 --> 0:11:30.040 discovering the oil and producing it. They're going to do 0:11:30.080 --> 0:11:32.480 it as quickly as they can and for as long 0:11:32.559 --> 0:11:35.840 as the international oil companies have the appetite to do it. 0:11:35.880 --> 0:11:38.520 This could be the last big development. 0:11:39.280 --> 0:11:43.439 To Hotel Ceo mentioned like six to seven of these 0:11:44.040 --> 0:11:47.319 offshore vessels that can pump up to one hundred and 0:11:47.320 --> 0:11:50.400 eighty thousand barrels a day each. That would put Namibia 0:11:50.440 --> 0:11:54.080 on the higher end of OPEC members from Africa. If 0:11:54.080 --> 0:11:58.360 it's going to happen, it's probably going to happen in Namibia. 0:11:58.440 --> 0:12:01.640 And so then Paul, what next for Namibia? Are are 0:12:01.679 --> 0:12:05.160 they hoping there could be more opportunities for investment? Is 0:12:05.160 --> 0:12:08.800 there something else potentially that could could be a boon 0:12:09.040 --> 0:12:10.559 at this point in time for the country. 0:12:11.000 --> 0:12:14.520 It's really interesting because there are two things going on there, 0:12:14.520 --> 0:12:17.880 the oil developments, and there's a whole plan for green 0:12:17.960 --> 0:12:22.160 hydrogen projects because Namibia has, according to the World Banks 0:12:22.280 --> 0:12:25.520 is like the best solar radiation, are the best sunlight 0:12:25.679 --> 0:12:29.400 to do big solar projects, and because of the government's 0:12:29.600 --> 0:12:33.840 openness to investment, that technology is still being developed. So 0:12:33.880 --> 0:12:38.359 you're seeing a really interesting concurrently these fossil fuel projects, 0:12:38.400 --> 0:12:42.480 these oil projects maybe the last of them, the last 0:12:42.520 --> 0:12:45.000 of the big ones, happening at the same time that 0:12:45.040 --> 0:12:49.240 these green hydrogen projects are being built, really as they're 0:12:49.280 --> 0:12:51.480 being as the technology is being developed. 0:12:51.960 --> 0:12:55.520 Yeah, there's definitely a contrast of the end of the 0:12:55.559 --> 0:12:56.880 old and the beginning of the new. 0:12:57.440 --> 0:13:00.200 Fascinating a bit of reporting. Paulbrik Ark, thank you so 0:13:00.240 --> 0:13:01.120 much for your time. 0:13:01.240 --> 0:13:01.520 But you. 0:13:03.200 --> 0:13:05.840 And as Paul just said, this moment can only be 0:13:05.960 --> 0:13:08.720 defined as the end of the old and the beginning 0:13:08.720 --> 0:13:12.520 of the new. But with neighboring and Golands still waiting 0:13:12.520 --> 0:13:16.640 to see the benefits of its own discoveries, expectations remain 0:13:16.800 --> 0:13:22.599 tempered in Namibia until they see the investments reach ordinary citizens. 0:13:25.120 --> 0:13:28.400 This program was produced by Adrian Bradley. If you like 0:13:28.480 --> 0:13:32.080 the episode, don't forget to comment and subscribe Wherever you 0:13:32.120 --> 0:13:35.160 are listening to this podcast, I'm Jennifer's Abasaga. 0:13:35.280 --> 0:13:36.679 Thanks, as always for listening.