Namibia Rejects TotalEnergies and Petrobras Deal for Regulatory Noncompliance

Namibia's Regulatory Framework for Oil Transactions

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.

Government's Statement on the Deal

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".

Implications of New Energy Regulations

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.

Petroleum (Exploration and Production) Amendment Bill

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.

Changes to the Role of Petroleum Commissioner

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 and Petrobras, which have had partnerships in oil assets in Brazil for more than a decade, did not immediately respond for comment outside regular business hours.

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; Editing by David Holmes)