Namibia: Business Implications from Major Oil & Gas Finds
There has been much media coverage of the relatively recent major oil and gas finds in Namibia. Let’s set the scene before discussing the resultant business implications.
First, there were the announcements by Shell and TotalEnergies of the offshore discoveries in the Orange Basin of the Graf and Venus deposits respectively and now there is the declaration that Shell and Qatar Energy have made a third major offshore, deep water find also in the Orange Basin. Analysts estimate that the country could have 11 billion barrels in oil reserves and that the huge revenues from these discoveries could double its GDP by 2040.
Attention should be given to the fact that there are a number of exploratory drillings taking place around and on the edges of these major finds. In February 2023, TotalEnergies and its various partners confirmed that they are embarking on a major multi-well appraisal and exploration programme. Another example is Impact Oil & Gas which recently announced its own multi-well drilling programme.
These drilling programmes are expensive (particularly as they are deep water) and require a long and technically sophisticated supply chain from specialised marine services to piping to onshore supply yards. One major supplier mentioned to us that the programme he was involved in costs over one million US Dollars per day!
Exploration programmes are in their own right, large generators of revenue for the Namibian government. And the Namibian authorities very understandably wish to ensure maximum local benefit from this new windfall. However, the oil and gas sectors are highly technical and much of the supply requirements will not be locally available. Oil company supply and employment matrixes I have seen predict needs from cleaners, drivers and security guards up to highly skilled marine technologists. So the question is ‘How will Namibia find the balance between local content and the import of foreign-supplied sophisticated products and skills?’ New legislation pertaining to oil and gas is being discussed in parliament.
Whatever degree of localisation is finally achieved, there will be a strong need by the major investors and operators as well as the smaller private role players for recruitment and deployment of appropriately skilled and experienced expats.
Africa Deployments – Namibia Employer of Record – Case Study
Africa Deployments (ADS) provides Namibia Employer of Records solutions to many of our clients operating in the Africa region. We will take care of the local employment contracts, calculation of the monthly payroll, salary payments by the 25th of each month and then ensure that the taxes are paid over to the local authorities.
The scope of work was as follows: Recruit and employ 60 call centre agents through our Namibia Employer of Record solution within Namibia. One would think this is quite easy… the catch… all 60 need to be fluent (written and oral) in German. For our client they were competing with other companies out of Cape Town, South Africa and the skills pot was becoming very scarce, meaning they were struggling to find top talent. This lead them to believe that if they could tap into the German-speaking community of Namibia that they would open up a new talent pool for their business operations. The idea was GENIUS but where to start…
This is where ADS came into the picture in offering the client a solution to recruit, employ (through Employer of Record) and assist with the HR Payroll management on a monthly basis. We started by posting the jobs on local job portals and received quite a few number of applicants for the position. We even took it a step further and approached the German Colleges and handed out pamphlets in German at the local shopping centres in and around Namibia. The response was overwhelming and the recruitment drive was a success.
Within the few months the Team was built up to 50 people. All applicants had to go through a strict interview process and pass a language test as a final hurdle to being employed under the local entity in Namibia. ADS was further requested by the client to assist in purchasing laptops and headsets for all the individuals in Namibia. All the individuals were working from home as COVID had proved that working from home model can be done.
Fast forward to one year on (March 2023), the client made a great success of their expansion into Namibia that they had decided to setup a presence within the Country. This is exactly what our Company stands for and we encourage our clients to use Employer of Record services for quick expansion at a fraction of the cost to set up. By our client choosing to use our services they saved themselves hundreds and thousands of dollars in getting up and running in Namibia. We know that our client will prosper for many years to come in the Namibian region and we wish them all the best going forward.
What this means to us at Africa Deployments… mission accomplished!
*The views expressed are those of the author and do not necessarily reflect the position of Africa Deployments nor its affiliate companies.*
Paul Runge sponsored Africa Deployments