Namibia won't recognise TotalEnergies, Petrobras deal due to not following procedure

WINDHOEK, Feb 8 (Reuters) - Namibia will not ⁠recognise the purchase ⁠of offshore ‍stakes in the Luderitz Basin announced last week by TotalEnergies and Petrobras until the oil companies follow the proper route for approval, government officials said on Sunday.

Jonas Mbambo, a ‍spokesperson for the presidency, confirmed that until a formal application is submitted and ​the prescribed statutory process is completed, "no transaction can be recognised or considered valid".

French oil major TotalEnergies and Brazil's Petrobras said on ​Friday they had each acquired a 42.5% stake in the PEL104 exploration licence offshore Namibia, as both firms look to develop oil in one of the world's last exploration frontiers.

The acquisition, from Maravilla Oil and Gas and Eight ​Offshore Investments Holdings, marks an expansion of Total's holdings in the southern African country, where it hopes to be the first to produce oil by the end of the decade.

MINISTRY CALLS FOR PRIOR ​APPROVAL

In a statement on Sunday, the Ministry of Industries, Mines and Energy said it was not notified of the developments, as required ‌by law, and was told about the planned announcement of the deal only "a few minutes" before its release.

"The government makes it clear that in accordance with the ​law, any transfer, assignment, or acquisition of participating interests ⁠in petroleum licenses in Namibia must obtain prior approval of the minister," the statement said.

TotalEnergies said the transaction remained subject to approvals from the Namibian authorities, including ‌prior approval by the energy minister.

Petrobras, which has partnered with TotalEnergies in oil assets in Brazil for more than a decade, also said the deal remained subject to local approval and would "proceed in accordance with Namibian law and ‌regulatory requirements."

NEW RULES FOR ENERGY SECTOR

Members of the government's proposed Upstream Petroleum Unit did not respond, nor did the Petroleum ‌Commissioner, Maggy Shino.

Sunday's statement comes as Namibia, a global exploration hotspot, aims for its first oil production while introducing far-reaching regulatory changes affecting the energy sector.

Besides new rules on local content, the recently installed energy minister, Modestus Amutse, introduced ‍the Petroleum (Exploration and Production) Amendment Bill last week that will establish the Upstream Petroleum Unit as a new regulatory authority, in the office of the president.

The ⁠bill, which was sent back in December after criticism by opposition parties, seeks to modernize the sector's legal framework, expand conflict-of-interest provisions for staff and strengthen fiscal transparency, among other measures.

It also does away with the position of Petroleum Commissioner.

(Reporting by Nyasha Nyaungwa and Wendell Roelf; Additional reporting by Marta Nogueira and Gabriel Araujo; Editing by David Holmes and Diane Craft)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Trump seeks to withhold $800 million in Congress-approved funds
• Fed's Hammack worried inflation expectations could deteriorate
• OpenAI's models accessed public US Census, SEC data, Bloomberg News reports