By: Justicia Shipena
Suspended Managing Director of the National Petroleum Corporation of Namibia (Namcor) Immanuel Mulunga said clauses in Namibia’s oil agreements with international corporations require confidentiality, and that some information cannot be shared with the public.
“Namcor being a state-owned enterprise subscribes to transparency. Namcor is also a commercial entity, so not all Namcor businesses can be all out in the media. Some of the information and agreements are subject to confidentiality clauses,” Mulunga stressed.
He stated on Eagle FM’s Unpacking the Day Show that while Namcor can talk about what it is doing, there are restrictions to what they can and cannot say.
“We are entering into agreements with international organisations and there are confidentiality clauses in some of those agreements,” he emphasised.
Mulunga further stated that Namcor has annual financial statements and reports that are easily accessible to individuals who want to stay up to date on the company’s activities.
“The information in those reports are available should someone really want to find more on what we are doing and most of our activities are always reported in the media,” he said.
Mulunga stated that Namcor owns 10% of all licences, emphasising that the 10% is not the only advantage to the country.
“Government benefits from taxes levied on oil and gas, royalties and additional profit taxes. So, when you divide the cake, the government walk away with about 67% of the entire cake.”
He remarked that one should not look at the 10% and conclude that this is the only thing Namibia profits from.
“Namibia is going to benefit much more than that. The 10% is only the equity component because government decided to participate at three levels,” Mulunga explained.
Namibia has recently emerged as one of the most appealing oil and gas players in the world, with two big discoveries made in 2022 by Shell, TotalEnergies and Qatar Energy, namely the Venus and Graff-1 discoveries.
Shell revealed a third discovery at its Jonker-1X well a year later, demonstrating the considerable potential that remains in Namibia’s offshore basins.
These finds not only spurred the efforts of other active E&P players, but also drew an array of new explorers to the market.
ExxonMobil has increased its acreage in Namibia with an agreement signed with Namcor for Blocks 1711 and 1811A, while French independent Maurel & Prom announced a five-well drilling campaign offshore Namibia in late 2022. Global major Chevron entered the market with an exploration licence in the Orange Basin in 2022.
Meanwhile, the Governor of the Bank of Namibia (BoN), Johannes !Gawaxab has called for the creation of a transparent legal and regulatory framework to regulate the country’s expanding oil and gas sector.
!Gawaxab made this call at the Namibia International Energy Conference in Windhoek last week.
He said Namibia must aim to build competent and accountable institutions, adding that like many other resource-rich countries, the country requires accountable resource governance structures to avert resource scarcity.
“International experiences have shown that resource rich countries tend to be more prone to corruption due to the large rents coupled with weak governance structures,” he stated.
The integrity of Namibian institutions, he said, is an essential factor that Namibia cannot afford to compromise on.
!Gawaxab emphasised the importance of Namibia developing a transparent legislative and regulatory framework to manage the industry in order to level the playing field and eliminate corruption and favouritism.
He stated that the Ministry of Mines and Energy, as custodians of the oil and gas sector, must assist and ensure that accountability mechanisms are in place through responsive legal framework and policies.
He said national oil companies are potentially valuable instruments, and as such, the National oil petroleum company must be held to the highest accountability and transparency standards to avoid becoming a state within a state.
“This will include implementing well functioning legal and regulatory systems, ensuring transparency and accountability for all stakeholders, controlling petroleum revenues and development national competence and capacity for the management of the resources.”
Speaking to The Villager, the Institute for Public Policy Research (IPPR) Executive Director Graham Hopwood while said Namibia has not been transparent with the deals in the oil and gas sector.
“Definitely not, we are not transparent,” he said.
Hopwood, on the other hand, stated that Namibia’s Harambee Prosperity Plan II commits the government to explore the formation of legislation to enhance transparency and accountability in the extractive industry, which includes oil and gas.
“We don’t need those standards at the moment but it is good that Namibia is looking into the standards of releasing contracts and necessary information of who owns what in the petroleum sector,” Hopwood said.
“We don’t have the necessary laws and regulations to ensure things like beneficial ownership, which is making sure we make available details of who owns what companies which is very important in the extractive sector.”
He recognised that Namibia is still a long way from being transparent, but said that the government is making progress, “so that we can prevent secret deals and payments which have happened in other countries.”
