CORRUPTION in the oil and gas business is a critical issue that affects many resource-rich countries. The sector is one of the greatest risk areas for corruption, as it frequently encounters grand corruption involving high-level officials and significant financial transactions.
Already in January this year, mines and energy minister Tom Alweendo swiftly denied serious corruption allegations regarding the issuing of oil and gas exploration licenses off the Namibian coast.
The allegations were contained in a letter authored by a certain Louis Beauvais, purported to represent TotalEnergies shareholders, and addressed to Patrick Pouyanne, who has been chairman and CEO of TotalEnergies since 2015.
Alweendo was once again confronted with allegations of corruption in the fledgling sector. Significant discoveries off the southern coast are expected to result in a multibillion-dollar oil and gas sector.
Last week, opposition parliamentarian Henny Seibeb posed a question to Alweendo in the National Assembly in connection with potential corrupt practices in awarding petroleum exploration licenses, the same accusations were also made on social media platforms.
“The assertion is that I have corruptly awarded an oil exploration license to a company owned by someone who is my friend, indeed a serious allegation. It is therefore required of all of us to be always alert and do everything necessary to guard against similar abuses and malfeasance in our nascent oil and gas sector. And now is the right time to do so while we are still at an early stage of the development cycle,” said the minister on Tuesday in parliament.
“In this respect, it is the petroleum commissioner who receives, evaluates and then recommends to the minister to either award or reject an application. To directly address the allegations, the following are the facts: Titan Oil and Gas is a Namibian registered company, and it has a minority participating interest in two petroleum exploration licences, namely PEL98 and PEL106. In addition, Namcor also has a minority participating interest in the two licenses. PEL98 was awarded in February 2021 to Eco Oil and Gas Services, a Namibian-registered company, while PEL106 was awarded in December 2022 to Oranto Petroleum, a Nigerian-registered company. It is, therefore, important to point out that the applicants in both licences were not Titan, but Eco Oil and Gas in the case of PEL98 and Oranto Petroleum in the case of PEL106. Hence, the licences were awarded to Eco Oil and Oranto Petroleum and not to Titan, as was alleged.”
He stated that it is, however, an absurdity to assume that just because a person is known to the minister or is a friend to the minister, his or her participation in the oil sector is only on account of the minister’s meddling influence.
He further explained that as per the provisions of S11 of the Petroleum Exploration and Production Act, the minister does not receive any application for petroleum licence but rather the petroleum commissioner, who then recommends to the minister to either award or reject the application. “Corruption in all its manifestations is abhorrent, it is repugnant and must be rejected by all of us, regardless of who is involved in it. Let us all join forces to ensure that our nascent petroleum sector is managed honourably, such that the economic benefits accrue to all Namibians fairly and equitably. Let us all fight corruption in its various forms and at all costs avoid crony capitalism,” encouraged the minister.
Furthermore, while delivering his ministerial statement, Alweendo encouraged local companies to enter joint ventures with foreign companies with the requisite capability when applying for petroleum exploration licenses.
This is because petroleum exploration is a highly capital-intensive process and as such, most local companies are not able to raise the funds needed to carry out exploration on their own.