Namcor’s oil partner’s ‘hands not clean’ – report

A report compiled for the National Petroleum Corporation of Namibia (Namcor) board suggests that Sequa Petroleum, which is part of a joint venture with Namcor, is questionable.

The South African corporate and commercial law firm Cliffe Dekker Hofmeyr, which compiled the report for the Namcor board, believes Sequa’s hands are not clean in respect of the transfer of funds from Sungara to Sonangol.

This is because Sequa Petroleum’s founder, Jacob Broekhuijsen, has refused to assist the law firm in the investigation which led to this report.

“We understand that Sequa is responsible for managing the finances of Sungara … His failure or refusal to assist in this investigation leads us to conclude that Sequa has not acted with clean hands in respect of the transfer of the funds from Sungara to Sonangol,” the report reads.

Last April, Namcor, Sequa Petroleum from Britain, and Petrolog Group formed a group called Sungara Energies.

This joint venture agreed to pay N$8 billion (US$451 million) to Sonangol P&P for a 10% interest in block 15/06, a 40% working interest in block 23, and a 35% working interest in block 27.

The consortium was supposed to pay N$400 million (US$22,6 million) as a deposit fee to Sonangol Petroleum within five business days after receiving the conditions.

Namcor has agreed to pay US$10 million (N$170 million) towards the deposit. However, the partners only paid US$6 million (N$102 million), leaving a shortfall of US$6,7 million (N$100 million).

It is unknown which partner has failed to pay.

Namcor’s suspended head, Immanuel Mulunga, took the transaction to Namcor’s board on 19 August 2022, but the board allegedly rejected the proposal to pay the N$100 million.

It appears Mulunga went ahead to finalise the transaction without the board’s blessing.

This led to Mulunga being investigated and suspended.

“Ultimately the scenario that is presented is one where the funds were available in Sungara’s account and were simply paid out. It is also clear that the payment of the deposit, when it was done, favours Sequa and Petrolog,” the report reads.

Therefore, the firm said Namcor’s legal and compliance teams should be more involved where there are decisions to be made, particularly any decisions to be made that affect them as a shareholder in Sungara.

“Any agreements or contracts that Namcor enters into with either Sungara or the other shareholders must be provided to the Namcor Legal Department for review and comment to ensure they do not disadvantage Namcor,” the report reads.

Moreover, the firm has found that the explanation by Mulunga for the undue haste with which the US$6,7 million payment from Namcor to Sungara was made, is that Sonangol would terminate the agreement if the deposit was not made by 19 August last year. “This is described by Mulunga as the greatest deal in Namcor’s history. To save the deal he authorised the payment of US$6,7 million from Namcor to Sungara to cover the portion of the deposit that Sequa and Petrolog could not pay,” the report reads.
Mulunga has previously told The Namibian that the company’s partners are to blame.

“They were supposed to pay their part of the deposit and couldn’t do it on time. So, we deposited the extra funds into our account in Mauritius and went to the board for approval to pay it over to Sonangol,” he said.

Questions sent to Namcor were yesterday not answered by the time of going to print.