Govt divided over Namcor’s retail role

There are internal divisions within government about how the current problems at the country’s oil parastatal should be dealt with, Namibian Sun understands.

According to well-positioned government insiders, high-level deliberations have taken place the past few months on whether to maintain the National Petroleum Corporation of Namibia’s (Namcor) current mandate in both the upstream and downstream side of things.

Critics are allegedly pushing for the parastatal to be stripped of its retail mandate so that it can focus solely on entrenching itself in the upstream petroleum industry, especially with the recent oil discoveries.

There are, however, those who feel Namcor should not be limited from participating in the entire petroleum chain.

This is the opinion of mines minister Tom Alweendo, who said Namcor should not be restrained from participating in either the downstream or upstream petroleum industry.

Indications are that government, at a ministerial level, is advocating for Namcor to stop operating as a retail fuel seller.

Can it do both?

Weighing in on the matter, Alweendo said if Namcor can prove that it is able to excel in both roles, it should be allowed to operate in both industries.

“For me, the real question is that as a national oil company, what should Namcor be known for and what must it be good at? Can it do both upstream and downstream equally well? If so, good and well,” he said.

According to him, it is imperative that Namcor is managed with good governance standards.

“All that’s important is that we need a financially strong, well-led and well-managed Namcor; especially now that as a country we are on the cusp of something very special after the discovery of oil and gas,” Alweendo said.

Highly competitive

According to acting managing director Shiwana Ndeunyema, Namcor is currently “in the process of reviewing its business strategy, especially given the absence of a clear establishment act".

“We are carefully considering all options regarding our downstream operations, as it's a highly competitive sector,” he added.

“Our commitment to profitability extends beyond the downstream sector. Namcor is actively exploring opportunities in sustainable energies and other strategic sectors. We believe in diversifying our portfolio to ensure long-term success and contribute positively to Namibia's energy landscape,” Ndeunyema told Namibian Sun yesterday.

Strategically-located networks

Namcor entered the downstream sector in 2017. At its launch, it said its strategy is to establish and secure strategically-located fuel and lubrication distribution networks to provide services to customers across the country.

The Fuel and Franchise Association (FAFA) in August last year took issue with Namcor’s presence in the downstream sector as both regulator and operator of fuel stations.

“Government is a regulator in the fuel industry. They decide where, when and with who you can do business. Now, they [Namcor] open a site right across another retail site. The question is: How was that assessed? Is that not a conflict of interest?” Hennie Kruger, FAFA chairperson, said at the time.

Namcor has since established 15 service stations across the country and embarked on several sites that are scheduled for completion later this year.

This comes as Namcor is targeting to set up 33 operational fuel stations by the end of 2024.