The Namibian government established a new licensing system for the oil and mining sectors, in order to address a backlog of applications which had developed over recent years. In this Legal Update, we examine some provisions of the new licensing system.
Namibia had previously operated on an open licensing system for the oil and minerals sector ("Open Licensing"), under which exploration and production rights in a given area were granted to the first party expressing interest in the area (i.e., "first come, first served"). Following the 2022 discovery of large oil reserves in the Orange basin by two major international oil companies, the number of license applications has grown significantly, causing a backlog. To relieve this backlog, the Ministry of Mines & Energy ("MME") replaced the Open Licensing system with a new, more restrictive one (the "New System").
The below graph indicates the application periods of the New System, which permits issuance of the following:
- Exclusive Prospective Licence;
- Reconnaissance Licence;
- Mining Licence;
- Mining Claim;
- Petroleum Reconnaissance Licence;
- Petroleum Exploration Licence; and
- Petroleum Production Licence.
The suspension of Open Licensing took effect on December 31, 2023, and the New System will enter into force on April 1, 2024.
The New System still allows for Open Licensing but only during the two two-month periods shown below. This should allow MME to promptly review all applications, thus avoiding backup.
The New System only applies new applications, and thus should not adversely impact any Open License applications already submitted.
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