Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: It could be Africa's next big oil rush. Discoveries off
Speaker 2: the shores of Namibia could propel it to be one
Speaker 2: of the world's major producers.
Speaker 3: If you multiply that by today's oil price, it's roughly
Speaker 3: a trillion dollars. There's another discovery that was made that
Speaker 3: could be ten billion barrels.
Speaker 2: Global energy titans are desperate to capitalize on the discoveries,
Speaker 2: with French multinational Total Energies hoping to start development on
Speaker 2: the Venus oil field as early as this year, and
Speaker 2: they aren't the only ones excited.
Speaker 4: We've read it one well in Namibia so well, you know,
Speaker 4: in our industry, we know that we need to appraise
Speaker 4: and to continue.
Speaker 5: It seems that the discovery might be giant.
Speaker 6: Well, certainly a basin that has seen some early exploration
Speaker 6: success by others. We've got one large block off Namibia
Speaker 6: that we expect to put on an exploration down in
Speaker 6: late this year or early next year.
Speaker 5: To give you a sense of our belief in Namibia,
Speaker 5: roughly a quarter of our deep water expiration spend in
Speaker 5: twenty twenty three and twenty twenty four will be directed
Speaker 5: to Namibia. So it is a theater that we fundamentally
Speaker 5: believe in.
Speaker 2: But as the world starts to wean itself off of oil,
Speaker 2: is there actually time for Namibians to benefit from the discovery?
Speaker 2: And could the rush fade away just as quickly as
Speaker 2: it arrived.
Speaker 1: I'm Jennifer's Abasaja.
Speaker 2: And this is the Next Africa Podcast, bringing you one
Speaker 2: story each week from the continent driving the future of
Speaker 2: global growth, but the context only Bloomberg can provide. Bloomberg's
Speaker 2: Paul Burkhardt has been watching the developments closely. His story
Speaker 2: is out now and he's joining us to talk through it. Hey, Paul,
Speaker 2: thanks so much for joining us. So let's just dig
Speaker 2: through this story because you've been taking a look at
Speaker 2: this in particular in Namibia. Yeah, and really what the
Speaker 2: implications are for the country. How big of a deal
Speaker 2: could this be for the country if there were to
Speaker 2: be a massive discovery. As you sort of allude to
Speaker 2: in your story.
Speaker 3: There's been a search for oil offshore in the MAYBEA
Speaker 3: for a long time. I was there, I think about
Speaker 3: ten years ago when I first moved to the continent,
Speaker 3: and there were a number of explorers that were out there,
Speaker 3: but Finally, in twenty twenty two, Shell and Hotel both
Speaker 3: made discoveries there and they've seen rough estimates holding as
Speaker 3: much as eleven billion barrels. So the fuzzy math is
Speaker 3: if you multiply that by today's oil price, it's roughly
Speaker 3: a trillion dollars. There's another discovery that was made that
Speaker 3: could be ten billion barrels. So again you kind of
Speaker 3: have to note that none of this has been deemed
Speaker 3: commercial yet. The oil might be there, but you have
Speaker 3: to figure out how to get it out. To put
Speaker 3: it into context, Nigeria, that's been Africa's biggest producer, has
Speaker 3: proven reserves of about thirty seven billion barrels. Just to
Speaker 3: get to the numbers that we're talking about right now
Speaker 3: really gives you a sense of scale. Opek is even
Speaker 3: courting the government and could double triple GDP, so it's enormous.
Speaker 4: It could really change things there.
Speaker 2: And so we've heard Totel discuss the fact that they
Speaker 2: plan to start work on this as early as the
Speaker 2: end of twenty twenty four. How quickly are are they
Speaker 2: moving on this, because I imagine there's quite a process
Speaker 2: to actually get things going and actually see the benefits
Speaker 2: of this.
Speaker 4: Yeah, there's Shell also has things planned.
Speaker 3: Totel seems to be a little ahead in the schedule,
Speaker 3: and overall there's really like kind of a gold rush
Speaker 3: that's going on. The Portuguese explorer GALP they made the
Speaker 3: other discovery, Chevron's bought into some of the blocks, and
Speaker 3: the other big oil companies that don't have a football
Speaker 3: yet they're going to be looking to buy into these
Speaker 3: areas offshore. So we've reported sources saying Exxon has interest
Speaker 3: in the Gallop discovery. Just about every big oil company
Speaker 3: is looking in the Orange Basin where they've struck oil.
Speaker 4: Things are moving quite quickly.
Speaker 2: How is it actually working on the ground, Paul, from
Speaker 2: your understanding, especially when you think about all the players
Speaker 2: that are now rushing in.
Speaker 3: Well, you know, the oil companies are racing against the
Speaker 3: energy transition really, which would.
Speaker 4: Bring on lower demand for oil.
Speaker 3: So as you're using cleaner sources of energy, you're using
Speaker 3: less oil that will start to dent this like one
Speaker 3: hundred million barrels a day that's consumed now, that'll start
Speaker 3: to go down. The value of crude will start to
Speaker 3: go down. These the oil companies aren't denial about that,
Speaker 3: but they want to develop these big discoveries, like really
Speaker 3: quickly before that really drops off. The pace we're seeing
Speaker 3: is unprecedented a lot of ways. So when I was
Speaker 3: in Wallas Bay last which is just on the coast,
Speaker 3: I could see oil equipment on the pier, people workers
Speaker 3: with coveralls that are marked with like schlumber Jay, one
Speaker 3: of the oil service companies. See those in town, and
Speaker 3: so it's happening. You hear officials talking about people wanting,
Speaker 3: companies wanting land, and there's really activity brewing. It's really
Speaker 3: poised to start.
Speaker 2: And you mentioned officials there, Paul, I mean you've been
Speaker 2: speaking to officials on the ground there. What are they saying.
Speaker 2: Is anyone optimistic potentially about this?
Speaker 3: I think yeah, they're optimistic, but they're also kind of cautious. Again,
Speaker 3: the oil industry being really specialized.
Speaker 4: I think the governor of.
Speaker 3: The area where the main harbor is said, we need
Speaker 3: to build skills and we just we need to train
Speaker 3: people up to be able to participate in this. The mayor,
Speaker 3: Trevino Forbes of Walvis Bay has talked about companies requesting land,
Speaker 3: things that I've never encountered much of in the past.
Speaker 7: When as a local authority We have received a lot
Speaker 7: of interest for people trying to acquire an end for
Speaker 7: storage facilities, and there is something that you're also looking at.
Speaker 7: But it's very difficult, you know, when you we can't
Speaker 7: continue operating in the way we operate in.
Speaker 3: I think there's still some skepticism about it, what will
Speaker 3: happen because there was a gas discovery that was made
Speaker 3: in the seventies some people in Namibia. I've spoken to
Speaker 3: Namibians on my trips there who mentioned this and they said, oh,
Speaker 3: nothing happened, So there's always going to be people will
Speaker 3: believe it when they can see it. Another thing that
Speaker 3: very close by that people have watched happen is Angola
Speaker 3: is a neighbor of Namibia.
Speaker 4: Everyone there has watched.
Speaker 3: How you know, the oil did kind of very little
Speaker 3: to boost livelihoods of most people on the ground, and
Speaker 3: already even the state oil company, Namcore has had some.
Speaker 4: Weirdness and arrests.
Speaker 3: There was a suspended official there because potential corruption and
Speaker 3: trying to clean that out. But there's still just the
Speaker 3: warning signs and there's some apprehension about it too.
Speaker 2: Of course, Paul, you're sticking with us and when we
Speaker 2: come back, we're going to ask whether this is actually
Speaker 2: a long term investment for Namibia, as you mentioned, potentially
Speaker 2: a risky one, especially if we think about where the
Speaker 2: world is right now starting to turn away from oil.
Speaker 1: We'll be right back, all right, welcome back.
Speaker 2: Paul is still with us here and we're talking through
Speaker 2: Namibia's oil rush. But if you think about where the
Speaker 2: world is at this time, some might wonder whether or
Speaker 2: not this is the opportune time to actually go all
Speaker 2: in on oil. We've seen governments across the world looking
Speaker 2: to reduce demand for oil as they try to tackle
Speaker 2: climate change or have.
Speaker 1: Some impact in it.
Speaker 2: So, Paul, you were mentioning this long term plan investment
Speaker 2: for the country, is is it risky considering where we're
Speaker 2: at right now in twenty twenty four.
Speaker 3: Of course, anything any major projects is subject to delays.
Speaker 3: Namibia's government is regarded as relatively stable, so comparatively on
Speaker 3: the continent there might not be as much risk versus
Speaker 3: other places with a lot of natural resources. But what
Speaker 3: we see even Senegal now we're seeing oil output there,
Speaker 3: but that project and another big one for liquefied natural gas,
Speaker 3: has had timelines extended more than once. So this is
Speaker 3: just the nature of a lot of these countries where
Speaker 3: there isn't a lot of infrastructure.
Speaker 4: As you see these projects fall.
Speaker 3: Behind or they're more and more delays, then there's going
Speaker 3: to be more of a problem with sort of meeting
Speaker 3: like a real healthy market for oil. So yes, there's
Speaker 3: an increasing risk for that. One of the things that
Speaker 3: we hear from a lot more often from African nations
Speaker 3: is this is the twist because they want to produce
Speaker 3: their own natural resources. Africa as a continent, it's only
Speaker 3: missions footprint is relatively small in comparison to the US
Speaker 3: or Europe or China. So they're saying, it's our time
Speaker 3: to produce this oil and gas and don't tell us
Speaker 3: what to do. So there's a real there's a willingness,
Speaker 3: and I think that's why Namibia also has like relatively
Speaker 3: good terms for oil companies to operate in and so
Speaker 3: that makes them even more attractive other than the resource itself.
Speaker 1: Yeah, that comes up a lot, Paul.
Speaker 2: I've noticed during COPP during the Climate Change conference. That
Speaker 2: happens every year, especially when you hear African leaders saying,
Speaker 2: you know, you need to consider the place at which
Speaker 2: the continent is at.
Speaker 1: When we think about the transition.
Speaker 2: I mean when we hear from other campaigners or environmentalists,
Speaker 2: are they receptive? I mean, are they understand that there
Speaker 2: is still development and you know, energy that is needed
Speaker 2: on the continent or do they push back?
Speaker 1: Would you say yeah, I.
Speaker 4: Think you get a range of answers.
Speaker 3: It's difficult argument to make for especially for environmental groups
Speaker 3: that want to end the use of fossil fuels, and
Speaker 3: certainly they don't want to see that developed off their coastline.
Speaker 3: In Namibia itself, it has a relatively small NGO sector,
Speaker 3: just because the population is just I think two point
Speaker 3: seven million or something like that proportionately that there aren't
Speaker 3: as many groups that would be potentially be resisting this.
Speaker 3: There has been resistance to an onshore oil campaign that
Speaker 3: came earlier because it's in a very ecologically sensitive area.
Speaker 3: We haven't seen an orchestrated campaign on the offshore projects
Speaker 3: in the way that we have seen the same in
Speaker 3: South Africa.
Speaker 4: But you know, don't know that could change.
Speaker 2: And is it safe to call this the last big
Speaker 2: oil rush poll?
Speaker 1: Is that too dramatic of a term?
Speaker 2: I mean, I wonder sort of how you place this
Speaker 2: against what else we're seeing across the continent.
Speaker 3: As you were mentioning, yeah, I think from the look
Speaker 3: of things now, I would say yes, there are some
Speaker 3: other prospects in West Africa, North Africa.
Speaker 4: There's some significant discoveries.
Speaker 3: In Ivory Coast where we've seen like really record developments.
Speaker 4: The Italian explorer any It did like a.
Speaker 3: Really quick time I think a couple of years between
Speaker 3: discovering the oil and producing it. They're going to do
Speaker 3: it as quickly as they can and for as long
Speaker 3: as the international oil companies have the appetite to do it.
Speaker 4: This could be the last big development.
Speaker 3: To Hotel Ceo mentioned like six to seven of these
Speaker 3: offshore vessels that can pump up to one hundred and
Speaker 3: eighty thousand barrels a day each. That would put Namibia
Speaker 3: on the higher end of OPEC members from Africa. If
Speaker 3: it's going to happen, it's probably going to happen in Namibia.
Speaker 2: And so then Paul, what next for Namibia? Are are
Speaker 2: they hoping there could be more opportunities for investment? Is
Speaker 2: there something else potentially that could could be a boon
Speaker 2: at this point in time for the country.
Speaker 3: It's really interesting because there are two things going on there,
Speaker 3: the oil developments, and there's a whole plan for green
Speaker 3: hydrogen projects because Namibia has, according to the World Banks
Speaker 3: is like the best solar radiation, are the best sunlight
Speaker 3: to do big solar projects, and because of the government's
Speaker 3: openness to investment, that technology is still being developed. So
Speaker 3: you're seeing a really interesting concurrently these fossil fuel projects,
Speaker 3: these oil projects maybe the last of them, the last
Speaker 3: of the big ones, happening at the same time that
Speaker 3: these green hydrogen projects are being built, really as they're
Speaker 3: being as the technology is being developed.
Speaker 4: Yeah, there's definitely a contrast of the end of the
Speaker 4: old and the beginning of the new.
Speaker 1: Fascinating a bit of reporting. Paulbrik Ark, thank you so
Speaker 1: much for your time.
Speaker 3: But you.
Speaker 2: And as Paul just said, this moment can only be
Speaker 2: defined as the end of the old and the beginning
Speaker 2: of the new. But with neighboring and Golands still waiting
Speaker 2: to see the benefits of its own discoveries, expectations remain
Speaker 2: tempered in Namibia until they see the investments reach ordinary citizens.
Speaker 2: This program was produced by Adrian Bradley. If you like
Speaker 2: the episode, don't forget to comment and subscribe Wherever you
Speaker 2: are listening to this podcast, I'm Jennifer's Abasaga.
Speaker 1: Thanks, as always for listening.