Namibia will not recognise TotalEnergies and Petrobras due to non-compliance with procedure

Government officials stated on Sunday that Namibia would not recognize the purchase of offshore stakes by TotalEnergies or Petrobras announced last week until the oil companies followed the proper approval route.

A spokesperson for the Presidency, Jonas Mbambo confirmed that "no transaction" can be recognized or considered valid until a formal application is submitted, and the prescribed legal process has been completed.

French oil giant TotalEnergies, and Brazil's Petrobras announced on Friday that they each had acquired a 42.5% share in the PEL104 offshore Namibia exploration licence. Both firms are looking to develop oil at one of the last frontiers in exploration.

Total's investment in southern Africa has been expanded with the acquisition of Maravilla Oil and Gas and Eight Offshore Investments Holdings. The company hopes to become the first oil producer by the end of the decade.

The Ministry of Industries, Mines and Energy released a statement Sunday saying that it had not been notified of developments as required by law and only learned about the planned announcement of the deal "a few minutes" before the release.

The statement stated that "the government makes it clear to all parties involved in the transfer, assignment or acquisition of petroleum licenses, in Namibia, must have the prior approval of Minister,"

Petrobras has been partnering with TotalEnergies for oil assets in Brazil since more than a decade. However, it did not respond immediately to a request?for comment after regular business hours.

TotalEnergies stated that the transaction was still subject to approvals by Namibian authorities. This includes prior approval from the energy minister.

NEW RULES FOR ENERGY SECTOR

The Petroleum Commissioner, Maggy Shino, and the members of the proposed Upstream Petroleum Unit have not responded.

Namibia, an exploration hotspot in the world, is aiming for its first oil output while also introducing vast regulatory changes to the energy sector.

Modestus Amutse, recently appointed energy minister, has introduced the Petroleum (Exploration and Production) Amendment Bill, which will create the Upstream Petroleum Unit, a new regulatory body, in the office of President.

The bill was sent back to the opposition parties in December following criticism. It seeks, among other things, to modernize and improve the legal framework for this sector, increase conflict of interest provisions for employees, and strengthen fiscal transparency.

The position of Petroleum Commissioner is also abolished.

(source: Reuters)