• Market Watch

The case for natural gas in Namibia

• 10 Hours Ago - 2025-08-08 00:00:00

Namibia's offshore oil discoveries have sparked widespread optimism about the country’s future.
With billions of barrels of oil and trillions of cubic feet of gas now confirmed off the Namibian coast, there is growing hope that these resources can transform the economy.
However, reports have since indicated a technical and commercial challenge: the reservoirs contain a high proportion of associated natural gas.
According to investors, this "gas-to-oil" ratio could drive up production costs and delay project timelines unless addressed. This situation calls for careful, proactive negotiations to strike a balance between investor returns and the country’s long-term development needs.
At the Economic Association of Namibia (EAN), we believe that Namibia must maximise the utilisation of its natural gas, rather than treating it as a by-product. Natural gas is more than just a transitional fuel; it is a cornerstone for economic diversification. It can power electricity generation, supply feedstock for fertilisers and petrochemicals, support the growth of heavy industries, and reduce Namibia’s reliance on expensive energy imports. With appropriate planning, Namibia can unlock new value chains, create employment, and spur industrialisation.

Complexities
Namibia is not alone in facing such complexities. Countries like Guyana and Trinidad and Tobago offer useful reference points. Guyana, though a newcomer to the oil industry, is implementing a Gas-to-Energy project to utilise associated gas for domestic electricity - an initiative that supports both investor operations and national development. Trinidad and Tobago, with a more mature sector, has long used its natural gas for downstream processing and LNG exports, building a globally competitive energy economy.
These experiences highlight the value of aligning gas strategies with broader national goals.
Nigeria’s experience serves as a compelling case study. For decades, Nigeria flared vast volumes of gas - over 2.5 billion cubic feet per day in the early 2000s. The economic and environmental costs were staggering.
However, with the implementation of the Nigerian Gas Master Plan in 2008 and the Petroleum Industry Act in 2021, the country began turning this challenge into an opportunity. The Nigeria LNG project alone processes over 22 million tonnes of gas per annum, significantly contributing to government revenue and the country’s energy needs.
Between 2005 and 2022, Nigeria reduced gas flaring by nearly 70%.

Clear lesson
The lesson is clear: strategic policy reform, infrastructure investment and stakeholder cooperation can transform natural gas from a cost burden into a pillar of national development.
Namibia, still in the early stages of oil and gas development, has the advantage of foresight. Globally, demand for natural gas continues to rise.
According to the International Energy Agency (IEA), natural gas consumption is projected to increase by 12% between 2022 and 2030, especially in regions where gas plays a key role in energy transition strategies. Europe’s recent energy crisis has further highlighted the strategic value of gas as a flexible and relatively cleaner energy source.
As stakeholders gather at the upcoming Namibia Oil and Gas Conference next week, hosted by the Economic Association of Namibia (EAN) in partnership with the Namibia Investment Promotion and Development Board (NIPDB) and the Hans Seidel Foundation (HSF), these issues will take centre stage. The conference offers a vital opportunity for government, industry, and civil society to align on a national gas strategy, one that ensures our gas resources are used for the benefit of the Namibian people.
As we shape the future of Namibia’s energy economy, let us draw from the experiences of our peers, not just in governance and local content, but in how we view and use our natural resources.