Namibia’s plans to import crude oil from Angola is at a halt, because the Angolan Government has not given the green light to the Memorandum of Understanding signed last year.
Petroleum Commissioner, Immanuel Mulunga confirmed this week that two governments signed the MoUs but they do not have the head way to implement what was discussed in the MoU.
“We have made several attempts with the Angolan government to implement the MoU but they have not gotten back to us. For now we are just stuck with implementation. We have tried to reach the Angolan government to kick start the process of importing the oil but they (Angola) have still not said anything,” he said.
He reiterated that the MoU between the two countries was signed last year in June for Angola to supply Namibia with crude oil before Namibia distributes this oil in and around the country.
The delegations at the MoU signing were led by the Namibian Minister of Mines and Energy Minister Isak Katali, and the Angolan minister of petroleum, Jose de Vasconcelos.
Mulunga further noted that Namibia will find an international company to refine the crude oil, adding that the MoU signed between Angola and Namibia is a business transaction which meant Namibia will not obtain the oil for free.
“Even though the two governments entered into the agreement, the National Petroleum Corporation of Namibia (Namcor) and Sonangol from Angola are supposed to enter in the final agreements,” said Mulunga.
However, Katali testified ignorance to the developments saying in order for Namibia to start importing Crude Oil from Angola, the National Petroleum Corporation of Namibia (Namcor) has to develop a business plan.
“We are still waiting for Namcor to develop its business proposal and submit it to the Angolan government, the Angolan government does not owe Namibia the same courtesy because Namibia needs Angola for the crude oil and not vice versa,” he said.
He added that Namcor was already informed either by late last year or early this year to draw up the business proposal to submit to the Sociedade Nacional de Combustíveis de Angola (Sonangol), the company it (Namcor) had to form a close cooperation with.
“After this has been done, we will go to Angola to determine what will be needed for this process to start, the manpower needed and all that. Namcor was informed by the time when our Permanent Secretary went to Angola, I am not sure when exactly if it was late last year or early this year and Namcor needs to submit this. According to Namcor, they need to do certain studies before they complete this business proposal,” said Katali.
Katali recapped that initially the government had asked Angola to provide Namibia with refined petroleum products, but it (Angola) only has the capacity to refine 30% of the fuel they use and they import oil from other countries to cover the rest of the 70% thus they are not in position to supply Namibia.
However, at the same meeting, the Namibian delegation not only expressed interest in buying oil from Angola but also showed interest in the sectors of refining crude oil, liquefied natural gas and the construction of storage infrastructure by participating in the second phase of the construction of the Lobito and Soyo refineries; the Angolan government was busy developing. This would have been by investing money in exchange for shares and petroleum.
Sonangol announced in December 2012 the formal start of the construction on the Lobito refinery, along that country’s central coastline with the capacity to process 200,000 barrels of crude oil a day. The Soyo refinery is located along the north coast of Angola close to the border with the Democratic Republic of Congo (DRC).
Namibia could save millions of dollars if the MoU is fully implemented and if it (Namibia) gains full commercial access to Angolan crude oil, since the country would no longer need to import fuel from overseas, as is currently the case.
In January 2007 Angola became a member of Organization of the Petroleum Exporting Countries (OPEC) as it produces and exports the highest amounts of petroleum in sub-Saharan Africa compared to other nations, Nigeria included.
Angola’s government budget is made up of 80% oils sales and it is the third-largest trading partner of the United States in sub-Saharan Africa, largely because of its petroleum exports; 7% of the United States’ oil imports are from Angola.
Meanwhile Namcor’s Chief Executive Officer (CEO), Obeth Kandjoze could not be reached for comment as he is out of the country whilst their Public Relations Officer, Utaara Hoveka is on leave.