September 24, 2024
Economy

Parliament wants Namcor to increase stake in oil companies to over 50%

July 07, 2022
Parliament wants Namcor to increase stake in oil companies to over 50%

The Parliamentary Standing Committee on Natural Resources has demanded that National Petroleum Corporation of Namibia (Namcor) increase its equity in oil exploration activities to over 50% from the current 10%.

Committee Chairperson Tjekero Tweya said the State-owned company’s 10% shareholding in ReconAfrica was not benefiting the country.

"The shareholding has benefited Namcor in terms of capacity building, no dividends received at the current stage of exploration until  production starts. The committee is therefore concerned that ReconAfrica is basing its rise of shares on the stock exchange. The money is raised using Namibia resources while Namcor's 10% shareholding is not worth anything," he lamented in a report presented before Parliament.

Namcor's 10 % shareholding is a free carry over by ReconAfrica until first production, according to the joint operations agreement signed in June 2021.

Tweya apportioned the blame for Namcor’s low shareholding and lack of financial benefits on the Mines and Energy Ministry, which negotiated the stake on behalf of the government.

“There was no rationale or criteria which the Ministry used to determine the 10% shareholding awarded to Namcor. The lack of policy to guide the Ministry in its negotiations with companies deprives the government from getting improved deals in shareholding and done in conflict with article 100 of the Namibia constitution," he said.

"Namcor holds about 98% shareholding in over 40 licences issued by the Ministry ranging from 10-15%. However, no evidence could be provided as to who and how much benefits Namibians will get from the so-called capacity building. The committee could also not establish how Namcor is benefiting from 98% in over 40 licences. Therefore, it appears to be a mere paper exercise as is the case with the 10% in Reconnaissance Energy Namibia," he said. 

The Parliamentary Committee in its findings recommended that the oil exploration project continues unhindered, a decision which was also endorsed by Parliament on Wednesday following the presentation.

"Recon oil and gas exploration in Kavango East has an overwhelming support from the regional leadership, local communities and traditional authorities who want to see it continue operating." the committee established.

The report was an outcome of a wide-ranging consultations to look into issues raised in petitions by Save the Okavango's Unique Lifestyle (SOUL) in collaboration with international civil society including local, scientist and activists, who requested the Minister of Agriculture, Water and Land Reform to halt all oil drilling and fracking in Okavango basin, done by Reconnaissance Energy Namibia (REN).

The petitioner in the objection in February 2021, wanted an immediate moratorium on all oil and gas exploration activities in Okavango, as well as the commissioning of a transboundary and multi-national strategic environmental assessment for the entire oil development life cycle. Other issues raised were that consultations were insufficient, absence of seismic data to guide drilling, impacts of fracking as well as harm to the environment, among others. 

“We remain committed to upholding business best practices and remaining compliant in conducting all our activities. We will take time to review the report and the recommendations that have been given. We look forward to engaging our different stakeholders in unpacking the points in the report and giving further clarification on some parts and conclusions in the report that need to be clarified,” said ReconAfrica Chief Executive Officer Scot Evans reacting to the Parliamentary Committee’s findings.

"Our project is the largest onshore oil-and-gas exploration program to be undertaken in Namibia. As such, dialogue is important. We applaud the Standing Committee for initiating this wide-ranging engagement process, which allowed all parties to share information and address any questions about the project. As the project proponent, we are thankful for the opportunity to meet with the government and affected stakeholders to continue our dialogue and hear all voices and to provide our input to the process.”

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Last modified on Saturday, 09 July 2022 09:49
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