WINDHOEK - Namibia's current strategy in terms strategic fuel reserves states that the country should hold between 30 to 45 days of reserves. Currently it is estimated that all the fuel storage facilities in the country can cater for a mere 15 days or less of strategic fuel reserves.
"This can no longer be. Planning for such short periods holds no security for the country of any sort, specifically if the demand and supply situation is disrupted," said Managing Director of the National Petroleum Corporation of Namibia (NAMCOR), Obeth Kandjoze.
NAMCOR is however actively seeking to secure access to strategic storage, which will be significantly boosted with the current construction of of a 75 million liter storage facility in Walvis Bay, which constitutes an investment of close to N$4 billion. The facility, which is expected to be completed by mid 2017, will be operated by NAMCOR. Kandjoze stressed the importance of the project from a national security point of view, saying the facilities will enable the country to increase its current storage capacity from 14 to 30 days.
The new bulk storage facility will be the largest fuel storage facility in the country, and the first ever to be 100 percent owned by government through NAMCOR. Existing storage facilities are owned by private oil companies. The new facility will allow the country to keep a given threshold of products. With the construction of this facility, NAMCOR intends to establish depots in strategic towns such as Ondangwa, Grootfontein, Mariental, Keetmanshoop, Gobabis and Luderitz.
Equally upbeat about the new massive storage facility, Walvis Bay Municipality Chief Executive Officer, Muronga Haingura, reaffirmed his council’s support for the project. “When the request came to us to avail land for the project, the Council was 100% behind it. I have been pleasantly surprised at the lightning speed at which the project has taken off," said Haingura at the ground breaking ceremony.
According to Kandjoze other countries such as the US, Japan and European countries typically hold fuel reserves of no less than 6 months. "Even China is building one of the world's largest storage facilities because they realize that their future is intricately linked to fossil fuel while they explore alternate means of energy," noted Kandjoze.
Namibia is however catching up with industrialized countries as NAMCOR and the Ministry of Mines and Energy invest millions of dollars in infrastructure and human resources to ensure that the country is not adversely affected and enabling it to step out of the 15-day reserve period.
"We need to anticipate that we will be in a different ball game once the bulk storage facilities will be completed. We will now be holding fuel both in terms of commercial and strategic requirements as set out by the government," remarked Kandjoze.
During the recent ground-breaking ceremony of the new storage facility, Permanent Secretary of the Ministry of Mines and Energy, Kahijoro Kahuure, noted that the construction of the fuel storage facility will not only strengthen Namibia’s international standing, but puts NAMCOR in a position to acquire additional skills the company did not have in the past. He said these new skills would enable NAMCOR to effectively manage the facility, once it is up and running by the year 2017.
Meanwhile, Kandjoze also commented that 2015 is the year in which NAMCOR needs to reclaim its mandate to import 50 percent of the country's refined petroleum products. This mandate was revoked in 2010 when the company became technically insolvent, meaning that the responsibility to import fuel into Namibia currently lies with the private sector.
NAMCOR does distribute refined products for wholesale purposes but is forced to purchase this from the private sector rather than importing. The company has around nine percent of the wholesale distribution market and manages three deport facilities although it does not currently have any retail sites. "We believe confidently that this (50 percent fuel import mandate) is NAMCOR owned mandate. Once the mandate returns to NAMCOR, it will have a serious impact on manpower and our ability to exercise the mandate," noted Kandjoze.
NAMCOR's mandate, as stated in the Petroleum (Exploration and Production) Act of 1991, involves carrying out reconnaissance, exploration and production operations, whether on its own or together with any other organization, to carry out any process of refining or disposing of, dealing in, petroleum or any by-products of such petroleum or take part in any such process carried out by any other organization, and, to advise or assist the Minister of Mines and Energy in relation to any agreement or in the relation to the discovery of petroleum or the development of petroleum resources. NAMCOR currently receives a levy income of 7.6 cents per liter.