Namcor mum on Recon share sale

The National Petroleum Corporation of Namibia (Namcor) says it does not have to explain why it plans to sell 5% of its stake in an oil exploration project it owns with Canadian firm Reconnaissance Energy Africa (Recon).

At the moment, Recon owns 90% of the project while Namcor owns the remaining 10%.

The deal is now subject to the approval of the ministry of mines and the Toronto Stock Exchange (TSX), despite concerns by the chairperson of the parliamentary standing committee on natural resources, Tjekero Tweya, regarding Namcor’s inability to gain favourable returns from its shareholding in the project.

Namcor managing director Imms Mulunga did not want to share the rationale behind plans to do away with 5% of its stake in the project, saying simply that it is a business decision.

‘We don’t have to explain’

“It’s a business decision. We don’t have to explain every business decision to the media,” he said on enquiry.

He added that the mines ministry would have to pronounce itself on the way forward with regards to granting permission for the sale to go through.

“The ministry will have to approve the transaction. The transaction will be finalised subject to [the] ministry’s approval,” he said.

Tweya previously questioned what benefit Namcor was deriving from its ownership in the project.

“With your 10%, they [Recon] benefit, but with their 90%, you don't benefit until the production phase. What if by the last well, Recon doesn't find oil?” he asked after Namcor presented the committee with documents last October.

Namcor said the oil and gas licence obtained by Recon has increased the Canadian company's market value from N$141 million in 2015 to N$25 billion in 2021.