Namcor owes Namra N$350m

The Namibia Revenue Agency (Namra) has written a letter to the state-owned National Petroleum Corporation of Namibia (Namcor) to demand that the oil company settles its customs and excise debt.

In an email dated 30 October, Namra said their records show that Namcor is in default of making due entry and payments of fuel imports.

Namcor reportedly owes Namra N$350 million.

Namra said Namcor grossly contravened the Customs and Excise Act by failing to declare the fuel from vessels as per standard operating procedure. These vessels are Maersk Altus, M/T Velos Forza, M/T Mulberry Express and M/T Scirocco.

Namra said the provisions as stipulated under the Customs and Excise Act note that any transgression in this regard is dealt with under the act.

“You are further reminded to take serious note of the provisions of the Customs and Excise Act. We take our regulatory obligations very seriously,” Namra said.

Namra joins the long list of organisations owed by Namcor, whose total debt as of September 2023 was N$1,9 billion. The debt has presented Namcor with major challenges in managing its cash flow due to a troubled 2022.

Namcor acting managing director Shiwana Ndeunyema told The Namibian last week the company is acutely aware of the issues at hand and is committed to taking extreme ownership and accountability to resolve them.

“While most of these challenges are as a result of historic factors, as interim (managing director) of Namcor, I fully embrace the responsibility for addressing them directly,” Ndeunyema said.

Namra last week declined to answer The Namibian’s queries, citing confidentiality.

“We are committed to upholding the legal and ethical standards governing the confidentiality of taxpayer information. Unfortunately, we are, therefore, unable to provide specific details,” Namra spokesperson Yarukee­kuro Ndorokaze said.

NAMCOR LOOKS TO NIGERIA FOR SOLUTION

While some suppliers have given Namcor a 30 November deadline to repay its debt, the struggling state-owned company is now negotiating with a private Nigerian company called Jeda Energy to be its new supplier.

Documents seen by The Namibian indicate that Jeda Energy is proposing short, medium and long term deals.

In a letter dated 10 October 2023, addressed to Ndeunyema, Jeda Energy’s managing director, Joseph Ilebode, said they are seeking to sign a minimum gas/oil term supply agreement with Namcor supplying cargo of 35 000 metric tonnes monthly.

Jeda said it can consider an extension of the credit days by an additional 30 days in a situation where Namcor experiences a downturn in sales.

In the medium term, Jeda is considering a crude swap arrangement with Namcor, where the equity allocation of crude from the exploration can be swapped for refined petroleum products with Jeda to avoid any financing arrangement.

“We have experience of this arrangement in Nigeria, where we are awarded a crude allocation for loading and in turn we supply gasoline to cover the value of the crude allocation,” said Ilebode.

In the long term, Jeda is promising refinery projects and interconnected pipeline financing. Jeda said with time, when Namcor is long on crude oil, there is no need for continued import of refined petroleum products into the country to meet domestic demand.

“Jeda is also of the view that with strong financing capacity, pipelines can be constructed to transport refined petroleum products either directly from the refinery or from the already existing storage terminals to meet demands of the neighbouring countries instead of trucks,” said Ilebode.

Ndeunyema did not directly comment on the Nigeria deal. Instead, he said Namcor has developed a turnaround strategy with the primary aim of addressing the working capital deficit facing the company.

Ndeunyema said the first phase focuses on short-term survival and stabilisation, coupled with decisive shareholder capital intervention. He said the second phase involves medium-term strategies centred on implementing a new operating model to reduce exposure and ensure sustained success.

“The third phase relies on the development of a 15-year strategic master plan that seeks to position the company for long-term sustainability, with efforts towards unlocking the opportunities presented by the recent oil discoveries and embracing the energy transition,” he said.

Questions sent to Ilebode were not answered.