State loses estimated N$100m in fuel storage deal
New deal to more than double revenue from N$1.8m to N$5m
Government may have forfeited up to N$100 million in potential revenue after a long-term fuel storage agreement at the state-owned Walvis Bay facility reportedly priced storage charges far below market value, raising questions about the management of a strategic national asset over several years.
The National Petroleum Corporation of Namibia (Namcor) is now adjusting fuel storage tariffs following the expiry of a five-year agreement with Validus Energy Namibia, which charged just four cents per litre – a rate government officials and industry sources describe as significantly undervaluing the facility.
Validus’ contract expires this month, January 2026, and will not be renewed.
Sources familiar with the agreement described it as a “bad contract”, alleging it disproportionately favoured private interests while limiting the state’s long-term revenue potential.
“The decision not to renew the contract is part of a broader effort to ensure that future agreements reflect market realities and national interest considerations,” a senior government official told Namibian Sun.
Strategic facility underpriced
The Walvis Bay fuel storage facility comprises seven tanks with a combined capacity of 75 million litres. Fully state-owned, it was constructed to secure national fuel supplies during potential disruptions.
Despite its strategic importance, officials concede that the facility was leased at a tariff that neither reflected prevailing market rates nor the cost of maintaining national energy security.
Government is in the process of gazetting minimum levies on petroleum handling – a regulatory step delayed for years – with the proposed floor reportedly set at around 16 cents per litre, three times the rate charged under the expiring contract.
Namcor acting managing director Maureen Hinda-Mbuende said the absence of gazetted tariffs contributed to the long-term undervaluation of the facility.
“To address this, Namcor has entered into a six-month interim contract with Validus,” Hinda-Mbuende explained.
“This is not an extension of the previous agreement, but a technical arrangement that allows us to implement a new strategy. It places us in a position to recover, and it is a major breakthrough for the state company," she noted.
Interest in the facility has already increased. Under the six-month interim agreement, storage tariffs are revised to about 17 cents per litre, raising Namcor’s revenue from roughly N$1.8 million to N$5 million per month.
Previous deal
Validus Energy Namibia secured the original contract through a competitive bid process five years ago.
The company is co-owned by businessman Mathew Hamutenya, a former deputy chairperson of Namcor, who holds a 30% stake through Millennium Investments, with the remaining 70% owned by global energy trader Vitol Holdings.
Under the five-year agreement, Validus paid Namcor approximately N$1.8 million per month. While the arrangement generated revenue, experts say they believe the tariff structure significantly curtailed the state’s potential returns.
Hamutenya declined to comment on detailed questions sent by Namibian Sun, stating that it is “not company policy to discuss commercially sensitive matters.”
Namcor has reportedly received expressions of interest from more than two companies offering storage tariffs of up to 19 cents per litre, highlighting the discrepancy between the previous deal and current market rates.
Policy shift and governance concerns
The move to terminate the long-term agreement and adopt market-related tariffs comes amid recent governance and procurement controversies at Namcor, which have drawn public and political scrutiny and renewed calls for transparency, accountability and stronger oversight.
Industry analysts say the case underscores broader concerns about how strategic national assets were managed for years under undervalued contracts without regulatory intervention.
Hinda-Mbuende, who assumed the acting managing director role five months ago, emphasised restoring governance, financial stability and investor confidence as her immediate priorities.
“Petroleum exploration represents a major opportunity for Namibia,” she said.
“Namcor must be positioned to safeguard national interests while ensuring transparency, accountability and long-term value for the country.”
Namcor will follow standard procurement procedures during the six-month interim period to determine the long-term management of the Walvis Bay facility.
The National Petroleum Corporation of Namibia (Namcor) is now adjusting fuel storage tariffs following the expiry of a five-year agreement with Validus Energy Namibia, which charged just four cents per litre – a rate government officials and industry sources describe as significantly undervaluing the facility.
Validus’ contract expires this month, January 2026, and will not be renewed.
Sources familiar with the agreement described it as a “bad contract”, alleging it disproportionately favoured private interests while limiting the state’s long-term revenue potential.
“The decision not to renew the contract is part of a broader effort to ensure that future agreements reflect market realities and national interest considerations,” a senior government official told Namibian Sun.
Strategic facility underpriced
The Walvis Bay fuel storage facility comprises seven tanks with a combined capacity of 75 million litres. Fully state-owned, it was constructed to secure national fuel supplies during potential disruptions.
Despite its strategic importance, officials concede that the facility was leased at a tariff that neither reflected prevailing market rates nor the cost of maintaining national energy security.
Government is in the process of gazetting minimum levies on petroleum handling – a regulatory step delayed for years – with the proposed floor reportedly set at around 16 cents per litre, three times the rate charged under the expiring contract.
Namcor acting managing director Maureen Hinda-Mbuende said the absence of gazetted tariffs contributed to the long-term undervaluation of the facility.
“To address this, Namcor has entered into a six-month interim contract with Validus,” Hinda-Mbuende explained.
“This is not an extension of the previous agreement, but a technical arrangement that allows us to implement a new strategy. It places us in a position to recover, and it is a major breakthrough for the state company," she noted.
Interest in the facility has already increased. Under the six-month interim agreement, storage tariffs are revised to about 17 cents per litre, raising Namcor’s revenue from roughly N$1.8 million to N$5 million per month.
Previous deal
Validus Energy Namibia secured the original contract through a competitive bid process five years ago.
The company is co-owned by businessman Mathew Hamutenya, a former deputy chairperson of Namcor, who holds a 30% stake through Millennium Investments, with the remaining 70% owned by global energy trader Vitol Holdings.
Under the five-year agreement, Validus paid Namcor approximately N$1.8 million per month. While the arrangement generated revenue, experts say they believe the tariff structure significantly curtailed the state’s potential returns.
Hamutenya declined to comment on detailed questions sent by Namibian Sun, stating that it is “not company policy to discuss commercially sensitive matters.”
Namcor has reportedly received expressions of interest from more than two companies offering storage tariffs of up to 19 cents per litre, highlighting the discrepancy between the previous deal and current market rates.
Policy shift and governance concerns
The move to terminate the long-term agreement and adopt market-related tariffs comes amid recent governance and procurement controversies at Namcor, which have drawn public and political scrutiny and renewed calls for transparency, accountability and stronger oversight.
Industry analysts say the case underscores broader concerns about how strategic national assets were managed for years under undervalued contracts without regulatory intervention.
Hinda-Mbuende, who assumed the acting managing director role five months ago, emphasised restoring governance, financial stability and investor confidence as her immediate priorities.
“Petroleum exploration represents a major opportunity for Namibia,” she said.
“Namcor must be positioned to safeguard national interests while ensuring transparency, accountability and long-term value for the country.”
Namcor will follow standard procurement procedures during the six-month interim period to determine the long-term management of the Walvis Bay facility.
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