6 Jun 2025
Energy experts say infrastructure gaps and limited fuel consumption hinder prospects for domestic oil refining, despite major offshore discoveries in the Orange Basin.
Namibia’s plans to develop a domestic oil refinery face significant hurdles, with low national fuel demand and steep capital requirements among the key obstacles, officials say.
The National Petroleum Corporation of Namibia (NAMCOR) reports that the country’s current fuel consumption stands at approximately 25,000 barrels per day—far below the level required to make a refinery economically viable.
“Refineries only become technically viable with high throughput, usually in the range of 100,000 to 300,000 barrels per day. Namibia’s current domestic fuel demand is relatively low, about 25,000 barrels a day,” said Paulo Coelho, NAMCOR’s Manager for Marketing, Communication and Public Relations.
Coelho added that under current conditions, a refinery would only be financially feasible if supported by long-term offtake agreements within the region.
Infrastructure limitations and high investment costs present additional challenges.
“Refineries can cost between US$3 to US$5 billion to build, and we still lack some supporting infrastructure, including pipelines and storage,” Coelho said.
Shakwa Nyambe, Managing Partner at SNC Incorporated and an energy lawyer, said future discoveries—particularly onshore—could shift the economic outlook.
“If we make a significant commercial discovery onshore, it opens up many opportunities. We could build pipelines to either export or move the product to Windhoek or Walvis Bay. So the potential isn’t just tied to offshore success. If things go well onshore, the opportunities could be massive,” said Nyambe.
He noted that regional exports and gas-to-power projects could enhance the feasibility of a refinery, but emphasized that government would need to steer such developments.
“For now, as a country, we’re focused on one thing: we’ve made an oil and gas discovery—how do we move from that to development and production?” he said.
Margareth Gustavo, Executive Director of Strategy and Branding at the Namibia Investment Promotion and Development Board, said a refinery remains a long-term aspiration, while the current focus is on transitioning from exploration to production.
“It’s important for Namibia to start the conversation now. But we have to keep in mind that our immediate focus is moving from exploration to production. That’s the stage we’re at,” Gustavo said.
“We should also remember that in many African countries, it took decades to get a refinery off the ground. It’s a long-term project. The discussion should begin now, but we must view it with a long-term lens.”
Namibia aims to begin oil production by 2029, with peak output projected to reach 700,000 barrels per day by 2035. The forecast is based on offshore discoveries in the Orange Basin, including TotalEnergies’ Venus field and Galp Energia’s Mopane field, which together are estimated to hold up to 15 billion barrels of oil.