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Exploration company’s favouritism claims dismissed

2023-08-23  Maria Amakali

Exploration company’s favouritism claims dismissed

Oil exploration company, Red Soil Energy and Mineral Exploration, which accused the mines ministry of favouring politically connected individuals in its allocation of offshore petroleum exploration licences, had its hopes dashed by the High Court.

The exploration company wanted the court to compel the mines and energy minister, Tom Alweendo to reconsider his decision to decline its application for a petroleum exploration licence on two occasions - in January and March 2021.

However, Judge Essi Schimming-Chase said Red Soil cannot claim to have been treated unfairly when it failed to follow proper guidelines by not submitting its financial records. 

“Red Soil cannot complain about not being considered if it did not comply with the requirements for consideration of the application. In fact, Red Soil was given a second chance together with the guidelines… and still failed to submit important documentation that would enable an informed consideration of the application,” said Schimming-Chase.

The court noted that exploration is capital-intensive and requires a serious and material investment, both financially and technically. Thus, in the absence of financial records, Red Soil’s financial capability to carry out exploration cannot be evaluated.

On the corruption allegations, she said the applicant did not provide any evidence supporting what they have alleged against the minister.

“Red Soil says nothing further than ‘politically connected people’ in this regard. Red Soil does not say that any of the companies that succeeded in the application were politically connected or how they were politically connected,” said Schimming-Chase before dismissing the review application with costs.

The company dragged Alweendo, the National Petroleum Corporation of Namibia (Namcor), and Indigenous Energy over the minister’s decision to decline its application for a petroleum exploration licence over Block 2512A and a portion of Block 2612A, in January and March 2021.

In court documents, Red Soil’s managing director, Kaura Kaura alleges he was informed by the petroleum commissioner, Maggy Shino that he must apply for other blocks as the ones he applied for have been reserved for “politically connected people”. 

He claims to have refused the suggestion as he deemed it to be improper. However, the formal letter indicates that the company did not meet the requirements and failed to demonstrate its technical and financial capability to carry out exploration operations.

“There is no rule or policy or guideline of the first respondent (ministry) that demands that an otherwise compliant application must be withdrawn because politically connected people deserve the blocks for which the applicant has applied,” said Kaura.

He further said the conduct constitutes gratification of politically connected people with the element of corruption.

However, the minister’s lawyer, Freddy Kadhila said the company has been treated fairly by the minister as it was given another opportunity to provide sufficient documents through the ministerial committee. 

This he said is despite the fact that the ministry publishes guidelines for members of the public to help them understand what is deemed important when applications for exploration licences are weighted against the requirements under the Act.

“The minister’s decision was lawfully valid as the applicant’s application did not indicate that it has technical staff or that it has a partner or consultant who will execute the proposed work programme,” said Kadhila.

He said this failure on the company’s part demonstrated that it did not have the technical capabilities to carry out exploration activities.


2023-08-23  Maria Amakali

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