International energy companies operating in Africa need to understand and adjust to many local legal requirements, and must look carefully at the way applicable laws have been interpreted by local courts and regulators, says Shakwa Nyambe, managing director of Namibian firm SNC Incorporated.
Namibia is aiming for its first oil output later this decade following two significant offshore discoveries earlier this year by Shell and TotalEnergies.
“For any new oil and gas discovery in a new frontier, oil companies and service companies need to be aware of the applicable legal and fiscal regimes,” Nyambe explained. “They need to be aware of the labour issues, taxation, customs requirements and environmental issues, because these are the things they’re going to face as they progress to development and to production.”
Companies operating in Africa not only need to be conscious of this array of legal and business issues, but also of how they differ from jurisdiction to jurisdiction, and how such issues have been handled locally when disputes have arisen.
“Unfortunately, every country has its own requirements and legislation,” said Nyambe. He leads a team at SNC Incorporated whose members have worked in national oil companies and in government, and trained in energy law at universities in the UK. “Your legal advice must be localised in order to ensure that you give your client the best advice to be able to conduct their business,” he emphasised, explaining that it’s thus important to work with people who have experience on the ground.
While working as an in-house counsel at the National Petroleum Corporation of Namibia, Nyambe saw the need to grow and nourish local legal and business advisory expertise in the fast-growing energy and natural resources sector. To help investors, government and oil companies, three years ago he established what is now SNC Incorporated, a leading energy, natural resources and commercial law firm based in Windhoek.
Nyambe and his team guide energy companies through a maze that includes the Petroleum (Exploration and Production) Act, 1991, the Environmental Management Act, 2007, stringent environmental impact regulations, taxation and customs laws and myriad other legal and business considerations.
“We have the experience on the ground relating to the customs, tax, corporate structure formations, and all of these issues to do with permitting and licensing,” said Nyambe, noting that energy law reforms are also on the horizon in Namibia.
“This is a new frontier and not all the laws relevant to the petroleum sector are in place and not all the issues have been catered for in the current laws,” he said of the evolving legal landscape. “There’s been discussion on amending the Petroleum Act, a process which still has a long way to go. It has started with consultation with the industry.”
Nyambe expects reforms to align with international standards, create a good working environment for oil and gas companies operating in Namibia, and ensure plenty of local benefits through a local content framework. He believes it was a “step in the right direction” when the Namibian government launched its Sovereign Wealth Fund in May 2022 to kickstart the sustainable development of the country’s hydrocarbon resources and to save money from those resources “to diversify the economy and benefit future generations”.
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