By: Justicia Shipena
National Petroleum Corporation (Namcor) board chairperson Jennifer Comalie has said that no law currently determines what percentage of shares government entities should get in mining companies with interests in Namibia.
Comalie made these remarks during the public hearing on Recon Africa with the Parliamentary Standing Committee on Natural Resources in Windhoek on Tuesday.
Namcor has a 10% stake in the exploration license in Canadian oil drilling company Recon Africa, which conducts exploration activity in the two Kavango regions.
The parliamentary standing committee on natural resources chairperson, Tjekero Tweya, had questioned how Namcor received the 10% stake.
Comalie said when Recon Energy applied for the license, they proposed to the ministry of mines and energy to offer Namcor the shares.
“Generally, we have a strategy to enter into joint ventures, where we take a certain percentage. There’s nowhere contained in any Act or policy what percentage the state-owned enterprise should take.
“But it has been the trend. You would recall Epangelo also taking 10% in Husab mine. It has generally been the trend in our country that we take 10% shareholding in these activities.
“Normally, it is also free to carry because we don’t have the capital to contribute to data collecting and exploration, but it does give us skin in the game.
“When the ministry granted the license to Recon Africa, they approved the suggestion made by Recon. So, the ministry is the one that said they are happy if Namcor carries 10%. It was not Namcor who applied for the shares.” she said.
Comalie said the ministry is the one that made that final decision on approving the licensing with the conditions.
“We are not involved in any of those activities. We get the data to be aware of what is happening, but we are not involved in any of the operations,” she said.
When questioned by the committee’s chairperson why Namcor was not awarded more, Comalie said, “That lies with the ministry of mines and energy.”
Comalie further said they played both in the up and downstream business.
“Some of the licenses have been issued to us directly, and we apply like anybody else through the ministry of mines and energy for a specific block license.
According to the Namcor chair, the 10% stake the SoE has in the oil exploration licence by Recon Africa was handed to them by the mines ministry.
To date, Namcor has spent over U$30 million in partnership with Recon Africa.
“In terms of capital intensity, since 2015, the government has spent zero cents on these operations. And in terms of revenue, no production is ongoing, so we are receiving neither,” said upstream exploration asset manager at Namcor, Martin Negonga.
Negonga said there is no risk to the government regarding operations as the country is carried up until production.
“The Namcor 10% is something that is given to us. We do not even negotiate on the 10%. It is given to us,” he said.
Namcor’s finance executive Jennifer Hamukwaya said they had done an internal calculation for the value of Namcor if they realised the 10% of the share of license PEL 97.
Hamukwaya said they looked at the trend of the share prices in light of the activities taking place at Recon Africa.
“At each activity that is taking place, the value of those shares is increasing. Calculation of the market value of 10% in PEL 73 on the 27 July 2021 it amounts to U$877 billion and 10% of Namcor share that amounts to 87.7 million,” she said.
Namcor’s chief executive officer, Immanuel Mulunga, previously said that Namcor doesn’t have a platform to engage Recon Africa over its concerns around the water license.
Questions sent to mines minister Tom Alweendo on how Namcor acquired its 10% stake were not answered.
At the same hearing, the ministry of environment, forestry and tourism said that traditional authorities were involved in the clearance for the activities by Recon.
“The traditional authorities were fully involved in the porting that area for drilling of oil,” said the environment ministry’s executive director Teofilus Nghitila.
Nghitila said based on the assessment done. The exploration site has little significance when it comes to wildlife.
“This not a regular route for wildlife, and the site is not within conservancies and not within protected areas. The Okavango Delta is far away from the exploration site, and it is not even in Namibia. It is Botswana. So, it is not affected,” he said.
Nghitila further said franking is not taking place, and it is something people planted into their minds.
“It is something that people made up, and they want us to believe that franking is taking place.”
However, according to Tweya, the standing committee’s information, the traditional authorities were only consulted last September.