When I arrived at the Hilton Hotel in Windhoek to interview the Chief Executive Officer of African International Energy, Aldworth Mbalati, I was expecting to meet a middle aged, greying or balding man.
To my surprise, the Mbalati I met was a youthful man, far younger that the leaders of the Swapo Youth League. Out of politeness, I refrained from asking his age, lest he think I looked down on him.
African International Energy (AIE) Plc recently announced that it had been awarded Block 2715 A and B with its local partner Petrotek to conduct gas explorations.
The company said it has committed US$10 million to the exploration phase. The South African-owned company has offices in the United Kingdom and a listing on the Frankfurt Stock Exchange.
Mbalati sounds very intelligent, wise and well informed for his age. He eloquently tells me that he sees great potential in Namibia with its small population and politically stable environment.
“Namibia is one of those fascinating African countries. It is a country that has a very stable fiscal regime. It is a country that holds great potential in hydrocarbons and hydrocarbons are what we are after.
“African International Energy is a company purely established to serve the African market with its energy needs and we believe that Namibia can be a true addition to our portfolio in terms of allowing us to achieve those objects,” he says.
In South Africa, the company owns the majority exploration rights in the Ibubhesi gas field located in the Orange Basin on the west coast of South Africa. The company also runs an energy project in Ghana.
Mbalati says it makes business sense to get into the Namibian market because the country is desperate for electricity.
“First of all Namibia is looking for electricity. The mines are looking for electricity.”
The company hopes to produce electricity from the Orange Basin in 2016, in a project he says is worth US$2.5 billion. The capital will come from shareholders and project finance. The initial plan is to produce 750 MW but the project could go up to 2000 MW, he says.
“Energy is a very good space right now. Development cannot happen without energy and everyone is keen to see development happen. So we are in a space where resources are prioritised to find this space to make sure that other sectors get a chance to survive, so I am highly optimistic about that.”
His company will sell electricity from the Orange Basin to any willing buyer in Namibia and not necessarily to NamPower.
“In the Namibian oil exploration licences, African Energy owns 63 percent, while a Namibian company, Petrotek, owns 27 percent and the State oil company Namcor owns 10 percent. We are hoping to get licences on other projects.”
I quiz Mbalati about why the company has not listed on its home turf, the Johannesburg Stock Exchange.
“We are a thoroughbred African company, registered in the United Kingdom, we are listed in Frankfurt and it is majority owned by South Africans. So it is an African entity, it is just a matter of corporate structuring that allows us to raise the most amount of capital in the mature markets in order to allow us to do what we want to do.”
But how does a small company, like African International Energy, expect to succeed when oil and gas majors have failed to develop the Kudu Gas project?
Mbalati says African International Energy is confident because it has “achieved critical milestones that other companies have failed to achieve”.
“We have the technical knowhow. We have financial support and the climate in terms of the demand for electricity has changed. We are very confident that we will be able to implement every step of the plans that we have.”
Right now, Mbalati is looking for office space in Windhoek for the Namibian operation; he hopes to open the office on 1 June.
I ask him whether African International will consider buying out Namibian partners. He says that will depend on the preference of the Namibian partners.
“The partnership is based on empowering the local economy; our partners have more equity in the business than other local companies on other projects.” –