Every Thursday the Windhoek Observer puts a spotlight on Namibian making news and shifting the needle. This week we feature Immanuel Mulunga, Managing Director of National Petroleum Corporation of Namibia (NAMCOR). Mulunga started his career at NAMCOR in 2015 where he served as a Managing Director. He previously served as the Petroleum Inspector in the Ministry of Mines and Energy.
OS: Can you please give us a brief synopsis of your educational background?
Mulunga: I grew up in the dusty streets of Katutura, during the last decade of apartheid where I attended Mandume Junior Primary School (Grade 2-4) and later went to Namutuni Senior Primary School until Grade 6. In 1984, I was fortunate enough to have passed an IQ test that guaranteed me a spot at the newly built Concordia College, a school for the intellectually gifted, on the outskirts of Windhoek.
That is really where I spent most of my best moments in life and interacted with Namibians from all walks of life. This is where I did my Grade 7-12, walking away with a Matriculation Exemption that gave me a free pass to attend any educational institution of my choice. After completing my Grade 12, I enrolled for a Bachelor of Science degree at the Academy which was the forerunner of the University of Namibia in 1991. After completing my degree, majoring in Chemistry and Biology in 1993, I was offered a position as a Technical Assistant and later as a Tutor in the Chemistry Department. In 1995 the Ministry of Mines and Energy advertised two positions of Petroleum Inspector in their newly created Petroleum Exploration Division, for which a colleague and I successfully applied for. That is how my journey in Oil and Gas started.
OS: Focusing on your current job at Namcor, your contract was recently renewed by the board. Congratulations. How will you describe your tenure at Namcor thus far?
Mulunga: My tenure at Namcor so far has been very exciting, I’m in the second half of my five-year term now. In the past seven years that I’ve been at Namcor, we have achieved significant results; rebranded Namcor into a vibrant and recognizable Namibian oil company, built 16 service stations across various localities in the country, successfully taken over the operations and maintenance of the National Oil Storage Facility and Jetty, grown the revenues of Namcor by 1000 percent from over N$700 million in 2015 to over N$ 7 billion by March 2023, procured an oil-producing asset from Sonangol in Angola for $450 million and made multi-billion barrel discoveries with our partners Shell, QatarEnergy, Impact and TotalEnergies in the Orange basin. We have created in Namcor an enviable and recognizable national oil company and we look forward to the next few years when we are going to be involved in the development of these discoveries to move into production by 2029.
OS: Do you mind sharing some of the highs and lows you’ve experienced so far at Namcor?
Mulunga: Some of the lows are that because we operate in the regulated downstream fuels market, we don’t always have our destiny in our hands. This is because one is limited as to the profit margins you can make because of the Basic Fuel Price formula that dictates the price that you can sell your imported refined petroleum products at. There’s an extra burden of being a state-owned company because of the extra criticism and scrutiny that we have to endure from the public and politicians. Because of the limited experience and skill of potential board members, we have had to deal with Board members that don’t necessarily understand the complexities of the industry and this has caused unnecessary strife between the Board and Management over the years.
OS: Many Namibians are confused about the role of Namcor. What exactly is Namcor’s role?
Mulunga: The role of Namcor is to basically participate in the oil and gas value chain on behalf of the State. Our mandate is to participate in both the downstream and upstream oil and gas value chain. We currently import fuel products into the country and store them at the national oil storage facility in Walvis bay and distribute them to all our customers in the B2B and retail segment of the market. We have been involved in oil exploration for more than 50 years now and we will be producing our own oil and gas in the next 6 years. We have a non-gazetted 10 percent carried interest in practically all exploration licenses in Namibia and we see ourselves as a top-tier African Energy Company in the next decade. We have also been traditionally responsible to advise the government on oil and gas matters but this role is slowly taking a back seat since we have become a fully-fledged commercial public enterprise three years ago.
OS:A huge congratulations to Namcor on the huge oil discovery. What does it mean to you personally as the Managing Director of Namcor?
Mulunga: The discoveries mean a lot for the country obviously and for Namcor as a corporate and personally for me as Namcor MD because I have been part of this journey for the past 27 years and it’s been a vindication and gratifying result for the continuous belief and focus on exploration of oil and gas in Namibia. Nothing can be more personally satisfying, in that one has made such a contribution to one’s generation and the country.
OS:Oil discovery seemed to be illusive to Namibia and then suddenly there are all kinds of wells being drilled successfully. What happened?
Mulunga: Oil and gas exploration is like high stake gambling. Your chances of success increase with the number of exploration wells you drill. We have drilled more than 20 exploration wells in the past 30 years without success until we hit it big last year in February. With each well drilled even if it’s a dry well, we gain valuable information about the license area and the wider basin so that we use that information to calibrate our seismic knowledge of the area and therefore optimizing our future drill locations and thus improving the chances of future success. It’s not uncommon to make multiple and more discoveries after an initial discovery because you basically derisk the area.
OS: What percentage shareholders does Namcor have in the wells that have been drilled so far? Are you able to make projections about their current commercial value?
Mulunga: As I said before, unlike in the mining sector and other African countries at a similar developmental level like us, our national oil company Namcor enjoys a 10 percent carried interest in all but one exploration license in the country. This was because of a political decision that a previous Minister of Mines and Energy, Erkki Nghimtina made to “decree” that Namcor shall henceforth take up a 10 percent carried interest in any license that he will issue and this has become a practice ever since.
This is a very big deal because by the time we prove up the reserves in these discoveries in the next two years, Namcor’s balance sheet will be hugely impacted in a positive way. Suppose our ongoing appraisal work establishes that the Shell and Total discoveries contain 10 billion barrels, a figure which is not beyond the realm of possibility, Namcor’s share will be one billion and if you are able to recover even just 10 percent of those reserves, you can do the Maths yourself. Namcor will become by far the biggest corporate entity in Namibia in the next half a dozen years.
OS: Are there any outstanding wells that Namcor and its partners are drilling at the moment?
Mulunga: Shell and Total are currently drilling appraisal wells to determine the quantity of the discovered resources. Other operators are also going to drill new exploration wells in Namibia this year. My prediction is that in the next 12 months, Namibia will see 10 exploration and appraisal wells drilled and see an expenditure of around US$ one billion for this work program. We have indeed moved into a new era of oil and gas exploration and development ushering a production of about 300 000 barrels per day of production by 2030, increasing as we move deeper in the next decade.
OS: What are the direct benefits of this oil discovery to Namibia?
Mulunga: Namibia will benefit in four different ways from this impeding oil bonanza; royalties, taxes, Namcor’s 10% equity and the increase in oil field services that Namibian companies will hopefully render during the years to come.
The economy in general will be positively impacted with the GDP per capital shooting through the roof. It will take wisdom and smart political leadership realize this however as we’ve seen other examples of countries making poor choices that did not lead to prosperity for their economies and people.
OS: Is Namcor training any Namibians right now in the field of hydrocarbon?
Mulunga: Fortunately Namcor has always been training it’s employees in the oil and gas space especially in the upstream space. Petrofund has played a fundamental role in this process even during the days of despair from the lack of exploration success. They never gave up and trained many Namibians in the oil and gas disciplines, many of which were absorbed by other sectors. There’s going to be a great need for many more oil and gas specialists hence our project to create a database of all trained oil and gas specialist to make it easier for employers to chose from. There is still going to be a serious shortage of experienced professionals in the next few years and we will see an influx of expatriates coming in to work in the various projects for the many international companies that are setting up shop in Windhoek, Walvis bay and Lüderitz.
OS: Do you think Namibians posses the necessary knowledge and expertise to competently participate in this field?
Mulunga: It will take us some time before we can declare ourselves ready to Namibianise the oil and gas industry because experience is not picked up in one day.