Businessman Knowledge Katti’s stake in Canadian firm Sintana Energy is valued at about N$200 million, positioning him as one of the biggest local players in Namibia’s oil discoveries.
This is according to calculations reported last month by Billionaires.Africa, an online news platform that tracks news related to African billionaires.
In recent years, Katti has used Canadian based Sintana Energy as a way to drive his interest in Namibia’s oil rush.
“Katti (52) owns 22.49 million shares, or 6.02%, in Sintana – a position now valued at just over US$11-million (N$200 million) based on the company’s share price of C$0.57 (US$0.37).
“He also sits on the board, cementing his influence as Namibia prepares to join the ranks of Africa’s oil producers,” Billionaires.Africa says.
It adds: “In Namibia, where Shell, TotalEnergies, and QatarEnergy have recently drilled some of the most promising offshore finds in decades, Sintana has quietly positioned itself as a junior with significant upside.
“Analysts see the Walvis and Orange basins as frontier acreage that could transform the country’s economy if developed at scale.”
Katti did not answer questions sent to him last month.
To some, the politically connected businessman has in the past 20 years dominated the allocation of oil blocks. He was previously friends with trial-awaiting former National Petroleum Corporation of Namibia (Namcor) managing director Imms Mulunga.
To others, he has earned himself a place in the big time by being relentless in Namibia’s oil search.
Billionaires.Africa says Katti has been credited with pulling more than US$400 million in outside investment into Namibia.
“He remains one of the wealthiest and most visible figures in the country’s natural resources landscape, both praised for his entrepreneurial drive and scrutinised for his political connections,” the report says.
Katti is not the only businessman who appears to be benefiting from this industry – even before a single drop of oil has been extracted for production.
The Namibian reported in 2023 that the country’s oil discovery made South African’s tycoon Johnny Copelyn a billion richer.
His 7.6% stake in Hosken Consolidated Investments (HCI) with interest in Namibian oil blocks was worth N$460 million in 2021.
By August 2023, it had jumped to N$1.4 billion, thanks to the oil discovery in Namibia.
Copelyn’s company’s oil interests in Namibia were entangled with those of Katti.
When Copelyn considered selling a part of its stake in a Namibian oil block, he was estimated to earn between N$8.5 billion and N$17 billion.
THE SINTANA CONNECTION
Two years ago, Katti received a windfall of N$221 million, which included N$74 million in cash and N$147 million in shares, from selling his company Inter Oil to Canadian firm Sintana Energy.
The transaction was completed in 2022, granting Sintana Energy control of an additional acquisition in five petroleum exploration licences that hold oil blocks close to oil discoveries off the coast of Lüderitz.
“On 8 March 2022, the company completed the acquisition of 49% of the outstanding shares of Inter Oil from Grisham, a private company owned by Mr Knowledge Katti,” the report says.
It adds: “The consideration for the acquisition consisted of a cash payment of US$4 000 000 (N$74 million) and the issuance of an aggregate of 34 933 333 common shares of the company (issued and valued at US$8 034 667 (N$147 million).”
Information from the annual report indicates that Inter Oil was operating at a loss at the time of the sale.
The company reported a net loss of N$4.5 million in 2023 and a N$2.2 million proportionate share of net loss during the same period.
Some industry observers have criticised the method of acquiring oil licences and selling them to the highest bidder.
LICENCE AFTER LICENCE
The petroleum exploration licences that were owned by Inter Oil, now acquired by Sintana Energy as part of the sale, include a 15% limited carried interest in licence 87.
Sintana Energy will further acquire 10% of the limited carried interest in each of licences 82 and 83 that were owned by Inter Oil.
Another 10% limited carried interest on the initial well in licence 90 will also now belong to Sintana Energy.
Licence 90 covers block 2813B located directly above where light oil was discovered by TotalEnergies and Shell Namibia Upstream BV.
Katti, through Trago Energy, owns 10% in this block, Australia headquartered Harmattan Energy holds a 37% stake, state-owned Namcor 10%, and Chevron (43%).
Inter Oil also held a 30% interest in a subsidiary which, in turn, held a 90% interest in onshore PEL 103.
SINTANA’S BIG NAMIBIA PLAY
Canadian-listed Sintana Energy has over the years been strengthening its position in Namibia’s oil industry.
In April 2024, Sintana Energy acquired an initial 49% stake in Giraffe Energy Investments.
The company has offshore and onshore oil projects in Namibia.
The deal was first disclosed on 24 April, in accordance with the provisions of a final agreement between Crown Energy and Giraffe.
Giraffe is the owner of a 33% interest in petroleum exploration licence 79 (PEL 79), which governs blocks 2815 and 2915 along the Namibian coastal basin.
The company acquired its initial 49% interest in Giraffe for US$2 million (N$40 million).
The deal will see Sintana retain an option to increase its ownership of Giraffe to 67%.
TAXMAN
The oil windfall has led to public concern over whether the country’s new wealth will benefit its citizens.
The Ministry of Industries, Mines and Energy has admitted to a lack of transparency, stating it doesn’t know who owns some of the awarded oil exploration licences.
This has fuelled questions about whether oil companies are fully complying with tax regulations on international transactions.
Namibia Revenue Agency spokesperson Yarukeekuro Ndorokaze says: “We are committed to upholding legal and ethical standards governing the confidentiality of taxpayer information, and we are therefore unable to provide specific details to your inquiry.”
He, however, confirms that tax is applicable even if a company is registered outside Namibia.
“The person liable for such tax is the seller – whether registered in our country or outside Namibia,” Ndorokaze says.
Institute for Public Policy Research director Graham Hopwood has over the years warned that the country’s oil discoveries should not just create more billionaires.
He says the country’s socio-economic challenges should be focused on.
Hopwood says the mines and energy ministry has a history of including ‘briefcase companies’ linked to politicians in the awarding of these licences, a practice he calls ‘rent-seeking’.
He suggests this would prevent wealth from benefiting the wider population.
Questions sent to the mines ministry were not answered.
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