TIRI MASAWI
The National Petroleum Corporation of Namibia (Namcor) has failed to submit annual reports to parliament and Cabinet for scrutiny for the past four years.
The reporting gap comes as the company continues to face controversy over alleged financial irregularities and fraud investigations involving hundreds of millions of Namibia dollars linked to fuel supply deals and credit arrangements.
Namcor spokesperson Paulo Coelho confirmed to Namibia Business Review last week that the state-owned oil enterprise has not produced annual reports for several years but said the company is working to resolve the issue.
“We acknowledge that a number of annual reports are currently outstanding. The corporation is currently finalising these reports, which will be published on our website soon,” he said.
Coelho said the company has strengthened its internal reporting processes to prevent future delays.
“The company has since strengthened the internal reporting processes so that future annual reports are produced and released within the required timeframes,” he said.
Institute for Public Policy Research (IPPR) executive director Graham Hopwood said Namcor is facing several challenges in maintaining strict corporate governance standards.
Speaking at a panel discussion on the governance of Namibia’s oil and gas industry on Thursday, Hopwood said the company’s challenges include the failure to produce annual reports for the past four years, the need to improve transparency and possible political interference in the company’s financial decision-making.
This, he said, compromises corporate governance in the process.
He also described the company’s leadership instability as worrying.
“Namcor is currently facing what we have now termed an MD Rodeo where they have seen five interim or acting MDs since 2023. This poses a challenge to the company’s stability and ability to participate in the oil and gas industry effectively,” he said.
Hopwood said he has been informed that progress is being made in recruiting a permanent managing director.
“I am told there is progress on the recruitment of a substantive managing director and we look forward to the conclusion of that process,” he said.
Hopwood said that the expansion of Namibia’s oil sector requires Namcor to strengthen its technical, financial and governance capacity to manage complex upstream projects.
Since 2022, Namibia has recorded major deep-water discoveries including the Venus-1 well operated by TotalEnergies and the Graff-1 well by Shell. Other discoveries include the Mopane well owned by Galp and TotalEnergies, as well as the Volans well owned by Rhino Resources and Azule Energy.
“Although Namibia has not yet produced oil, the current pre-production phase is critical for building governance and oversight systems. Namibia needs to implement a strong local content policy in the oil and gas industry that embeds anti-corruption clauses in contracts to set clear conduct standards for companies and government.
According to Hopwood, the policy should also establish independent oversight bodies to supervise local content policies and vet approved local suppliers. This he said is to ensure fair procurement rules to prevent overpricing, bid-rigging and cartel behaviour, and require disclosure of beneficial ownership to prevent front companies from exploiting local content requirements.
He added that the policy should publish transparent local content reporting on jobs, suppliers and beneficiaries to enable accountability.
WORK IN PROGRESS
Namcor spokesperson Coelho said the company is working to increase its stake in the oil and gas industry from the 10% it owns in most blocks to a more significant role in the future.
“As the upstream sector develops and internal operatorship capabilities grow, the corporation will seek to increase state participation where it is commercially viable, including taking up operatorship,” he said.
He added “Please note that NAMCOR is indeed already an operator in a number of licenses, with participation of over 60%.”
However, Coelho said efforts to improve the company’s efficiency and full participation in the oil and gas industry have been hampered by limited financing.
“Oil and gas exploration is a highly capital-intensive industry that requires significant technical and financial capacity,” he said.
He added that “Namcor’s current participating interest in many licences ensures national oversight of petroleum activities, benefit from knowledge and technology transfer while sharing the immense financial and operational risks with experienced international operators.”
Coelho said that the recruitment process for a substantive managing director is underway and an announcement will be made once the process has been concluded.
Paradigm shift
Rodney Cloete, a member of parliament for the Independent Patriots for Change (IPC) and shadow minister of international relations and trade, has also questioned Namcor’s minimum stake in the oil and gas industry.
He told the Namibia Business Review that the government needs to develop a model that increases the state company’s ownership in most oil blocks to ensure greater value for the country.
However, Cloete said that the governance framework for awarding licences must first be fixed.
“Honestly, fix the system before you argue about the percentage. Right now licences worth hundreds of millions are handed out through ministerial discretion with no bidding, no published contracts, no rules,” he said.
Cloete said Namcor’s 10% participation is not based on a clear policy.
“Namcor’s 10% is not a policy. It is whatever a minister decides in a room. That has to change first.”
Cloete called for competitive licensing, publication of contracts and a statutory participation floor in the Petroleum Act.
“Norway built a US$1.7 trillion (N$32.3 trillion) fund not because Equinor had a big share but because they built rules that could not be bent by whoever was in office. Ghana did the same. That is the model.”
Cloete said competitive licensing would not scare away investors but instead provide policy clarity.
Cloete further said Namcor must urgently address its internal challenges if it is to improve efficiency and meaningfully participate in the emerging oil industry.
“They have seen six managing directors. A defiant board, N$1.6 billion in debt. Nine ex-officials charged over N$274 million in fraud. I will not pretend otherwise. But I want Namibians to ask one question: who made Namco this weak?,” he said.
He added “This did not happen by accident. It happened under the same political model we are still defending. You cannot use a problem you created as the permanent reason to give Namibians less.”
Cloete said he has asked the line minister to explain Namcor’s role in the oil industry.
““Fix Namcor urgently. First oil is coming in 2029. We are out of time to wait. Namibians deserve to know whether Namcor’s 10% is a policy or a political arrangement designed to stay small,” he said.
Cloete called on the investors to adhere to Namibian rules.
“To investors, I say the simple transparent rules protect you too. The problem is not your capital in our oil. The problem is a domestic system that has turned licensing into a private benefit scheme. Fix that and Namibia becomes everything its geology promises,” Cloete said.
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