Pay more for more extractive stakes: Mulunga
Government cannot ask for more shareholding in mining unless it invests more in exploration projects, says Namcor boss Immanuel Mulunga.
16 April 2021 | Energy
Namcor boss Immanuel Mulunga says concerns over the government's minimal shareholding in mining and oil exploration projects across the country is due to the cash-intensive nature of the business.
Government has over the years always received 10% shareholding on mining and exploration projects. Namcor is currently as 10% shareholder in the ongoing controversial Recon Africa drilling project taking place in Kavango East.
“You cannot ask for more shareholding if you are not willing to fork out more financial resources, our people need to understand that. There is significant investment that goes into exploration and this cost is mostly carried by the investors,” said the former petroleum commissioner.
Mulunga was speaking during Namibian Sun's 'Evening Review' show on Tuesday, where he touched on an avalanche of issues related to the petroleum industry.
He also said Namcor wants to lessen its dependence on the fuel levy by increasing its revenue streams.
“We want to devise additional revenue streams to ensure financial stability, this will also ensure that we compete internationally,” he said.
Mulunga also said Namcor will pay government N$2.5 million monthly for the usage of the national oil storage facility in Walvis Bay.
Mulunga also took note of the concerns over the exploration activities by Recon Africa in Kavango East, saying “there is a lot of misinformation going around”.
“There could be potential damage but it is a matter of mitigating those risks because we have a good environmental law. We are confident that there will be issues but we are ready to deal with those issues a manner that protects our environment. Namibia is a sovereign state and we should make use of our resources to help our people,” he said.
His appearance on the show came just two days before Recon Africa announced that oil exploration activities in Kavango East have unearthed “a big potential for a very valuable energy resource” and “evidence of a working conventional petroleum system”. The results are from the first of three wells it planned to drill.
Dan Jarvie, petroleum systems chemist and member of ReconAfrica's Advisory Board, yesterday stated that: “These shows are indicative of migrated, thermogenic petroleum and occur over three different intervals in the 6-2 test well. The intervals penetrated include highly porous, permeable sediments and marine source rocks as predicted, and an extensive marine carbonate lithofacies.
“Mud gas results indicate a high BTU gas with the presence of light oil in numerous cutting samples. Based on these initial results, the components and processes for a working petroleum system are all present,” Jarvie said. Mines and energy minister Tom Alweendo said the results of the well confirms a potentially valuable energy resource for the country and therefore a significant development for Namibia's onshore exploration efforts.
“The positive results of this well have provided us with the critical information required to unlock the country's petroleum prospectivity and is the first step in the process of locating significant accumulations. We can now confidently confirm Namibia is endowed with an active onshore petroleum basin,” he said.