Cabinet approves Dangote oil deal
Fears over deal\'s impact on Namcor
Cabinet this week approved a proposal by Nigeria’s Dangote Petroleum Refinery to construct a fuel storage facility in Namibia – but energy sector technocrats have flagged concerns over the deal’s proposed 99-year lease and exclusive rights to a key jetty currently managed by Namcor.
Owned by Africa’s richest man, Aliko Dangote, the planned facility will have capacity for at least 1.6 million barrels – about 200 million litres – of gasoline and diesel, targeting the supply of refined fuel to southern Africa.
According to sources close to the negotiations, Dangote is pushing for a 99-year lease, reportedly in conflict with Namibian port laws, which generally limit such agreements to 25 years.
“Dangote wants exclusive rights to the jetty currently managed by Namcor and used by all private players such as Puma, Total and Engen,” one concerned source said.
“Most importantly, if Cabinet approves this deal without clear conditions that he can only sell his fuel to neighbouring countries and not Namibia, this will be the end of Namcor.”
Energy minister Natangue Ithete could not be reached for comment. However, National Planning Commission director-general Kaire Mbuende, said to be leading government’s negotiations, told Namibian Sun yesterday there is no risk of Dangote’s investment undermining Namcor, the state-owned oil company.
“The envisaged investment targets a market that Namcor is not necessarily involved in. The lease will be negotiated within the industry’s common range to deliver a win-win outcome for both the investor and Namibia,” he said.
“Namcor, as manager and user of the jetty, will obviously negotiate a deal that serves Namibia’s interests. There are many options to ensure business continuity while injecting capacity for optimal utilisation by all stakeholders.”
In June, Dangote paid a courtesy call on President Netumbo Nandi-Ndaitwah, who stressed that Africa’s growth depends on value addition and bold initiatives by Africans themselves. “Job creation, food security and economic growth are crucial for Africa to emerge as a respected continent,” she said, adding that African entrepreneurs carry a significant responsibility in driving development, with public-private partnerships key to success.
Nandi-Ndaitwah has since secured Dangote’s commitment to invest in Namibia, with the company announcing plans for a major oil terminal in Walvis Bay. Dangote previously indicated it intends to build storage tanks to supply fuel to Namibia, Botswana, Zambia, Zimbabwe and potentially southeastern Democratic Republic of Congo, positioning Walvis Bay as a regional distribution hub.
The project is expected to create jobs, strengthen energy security and transform Walvis Bay into a key gateway for the region’s fuel supply.
Southern Africa, still heavily dependent on ageing or shuttered South African refineries, could see its fuel market reshaped by Dangote’s entry. The company’s $20-billion refinery near Lagos – completed in 2023 – has a refining capacity of 650,000 barrels per day, making it Africa’s largest.
This means refined products from Nigeria could soon be distributed through Namibia.
Meanwhile, Namcor recently revealed that hosting and pipeline usage fees at the National Oil Storage Facility (NOSF) in Walvis Bay, which it operates on behalf of the mines and energy ministry, remain too low to break even, let alone achieve profitability.
Commissioned in 2021, the multi-billion-dollar NOSF was built between 2015 and 2021 and includes a tanker jetty, pipelines and a terminal with a 75-million-litre storage capacity. The initial stock comprised 37 million litres of diesel, 21 million litres of unleaded petrol and five million litres of very low sulphur fuel oil.
Despite its modern capabilities, Namcor says sub-market-rate fees have kept the facility in the red.
Namcor spokesperson Utaara Hoveka told Namibian Sun that the corporation, together with the energy ministry, has reviewed the NOSF fee structure for gazetting. “This means future agreements will be based on these revised fees, which we anticipate will lead to improved financial performance of the facility,” he recently said.
Namcor declined to disclose details of the contract governing its management of the facility, saying it would not be prudent to do so.
[email protected]
Owned by Africa’s richest man, Aliko Dangote, the planned facility will have capacity for at least 1.6 million barrels – about 200 million litres – of gasoline and diesel, targeting the supply of refined fuel to southern Africa.
According to sources close to the negotiations, Dangote is pushing for a 99-year lease, reportedly in conflict with Namibian port laws, which generally limit such agreements to 25 years.
“Dangote wants exclusive rights to the jetty currently managed by Namcor and used by all private players such as Puma, Total and Engen,” one concerned source said.
“Most importantly, if Cabinet approves this deal without clear conditions that he can only sell his fuel to neighbouring countries and not Namibia, this will be the end of Namcor.”
Energy minister Natangue Ithete could not be reached for comment. However, National Planning Commission director-general Kaire Mbuende, said to be leading government’s negotiations, told Namibian Sun yesterday there is no risk of Dangote’s investment undermining Namcor, the state-owned oil company.
“The envisaged investment targets a market that Namcor is not necessarily involved in. The lease will be negotiated within the industry’s common range to deliver a win-win outcome for both the investor and Namibia,” he said.
“Namcor, as manager and user of the jetty, will obviously negotiate a deal that serves Namibia’s interests. There are many options to ensure business continuity while injecting capacity for optimal utilisation by all stakeholders.”
In June, Dangote paid a courtesy call on President Netumbo Nandi-Ndaitwah, who stressed that Africa’s growth depends on value addition and bold initiatives by Africans themselves. “Job creation, food security and economic growth are crucial for Africa to emerge as a respected continent,” she said, adding that African entrepreneurs carry a significant responsibility in driving development, with public-private partnerships key to success.
Nandi-Ndaitwah has since secured Dangote’s commitment to invest in Namibia, with the company announcing plans for a major oil terminal in Walvis Bay. Dangote previously indicated it intends to build storage tanks to supply fuel to Namibia, Botswana, Zambia, Zimbabwe and potentially southeastern Democratic Republic of Congo, positioning Walvis Bay as a regional distribution hub.
The project is expected to create jobs, strengthen energy security and transform Walvis Bay into a key gateway for the region’s fuel supply.
Southern Africa, still heavily dependent on ageing or shuttered South African refineries, could see its fuel market reshaped by Dangote’s entry. The company’s $20-billion refinery near Lagos – completed in 2023 – has a refining capacity of 650,000 barrels per day, making it Africa’s largest.
This means refined products from Nigeria could soon be distributed through Namibia.
Meanwhile, Namcor recently revealed that hosting and pipeline usage fees at the National Oil Storage Facility (NOSF) in Walvis Bay, which it operates on behalf of the mines and energy ministry, remain too low to break even, let alone achieve profitability.
Commissioned in 2021, the multi-billion-dollar NOSF was built between 2015 and 2021 and includes a tanker jetty, pipelines and a terminal with a 75-million-litre storage capacity. The initial stock comprised 37 million litres of diesel, 21 million litres of unleaded petrol and five million litres of very low sulphur fuel oil.
Despite its modern capabilities, Namcor says sub-market-rate fees have kept the facility in the red.
Namcor spokesperson Utaara Hoveka told Namibian Sun that the corporation, together with the energy ministry, has reviewed the NOSF fee structure for gazetting. “This means future agreements will be based on these revised fees, which we anticipate will lead to improved financial performance of the facility,” he recently said.
Namcor declined to disclose details of the contract governing its management of the facility, saying it would not be prudent to do so.
[email protected]
Comments
Namibian Sun
No comments have been left on this article