A Company that unsuccessfully applied for a petroleum exploration licence in Namibia has taken its claim of unfair treatment by the mines ministry all the way to the Supreme Court.
The company Red Soil Energy and Mineral Exploration (Red Soil) filed a case in the Windhoek High Court in 2021 after the then minister of mines and energy, Tom Alweendo, rejected its application for a petroleum exploration licence covering four oil blocks off the southern Namibian coast.
After its application in the High Court failed, an appeal by Red Soil was heard in the Supreme Court yesterday.
In its High Court review application, the company alleged the minister had not followed fair and reasonable administrative processes.
Kaura Kaura, Red Soil’s managing director, additionally claimed that petroleum commissioner Maggy Shino had encouraged him to withdraw his application for a licence.
“She informed me that the blocks are reserved for politically connected people and that I must apply for any blocks west to those the applicant applied for,” he claimed.
Shino has denied all of the allegations and filed a confirmatory affidavit together with an affidavit by Alweendo.
“It is quite vexatious that [Red Soil] makes such an incriminating allegation on Mrs Shino when it is common cause in terms of the [Petroleum Exploration and Production Act] that the task of granting or refusing applications is vested in the minister and not for the petroleum commissioner,” Alweendo said.
“According to Mrs Shino, she never at any point in time or on any communication platform informed Mr Kaura that the blocks are for politically connected people and that he must withdraw the applicant’s application,” Alweendo also said.
The minister’s stance was that he was within his rights to reject Red Soil’s application, given that the application was incomplete and did not follow the ministry’s guidelines to provide proof of financial and technical capability.
The High Court dismissed the company’s review application in 2023, finding that Red Soil did not provide a complete application by failing to submit audited financial statements or a workplan budget.
“This indicates a lackadaisical [lethargic] approach to the application,” judge Esi Schimming-Chase said in her judgement.
In its appeal, Red Soil claimed it was treated differently than other companies applying for petroleum exploration licences.
Red Soil legal counsel Karla Saller yesterday argued before acting judges of appeal Dave Smuts, Theo Frank and Shafimana Ueitele that the Petroleum Exploration and Production Act of 1991 provides a minimum threshold that a licence application must meet to be considered, and that Red Soil met that threshold.
“The established practice in evaluating applications for petroleum licences is a two-stage one,” Saller said.
After the first evaluation, the minister should call for additional information he needs to make his decision, she said.
However, Red Soil claims that although this is the established practice and was how a competing application for the same oil blocks was evaluated, the minister immediately rejected Red Soil’s application.
The company also claims it has new evidence of Alweendo and Shino intending to improperly award the oil blocks.
Legal counsel Albert Strydom, representing the minister of mines and energy, argued that Red Soil’s licence application was completely inadequate, and that the company was given multiple opportunities to reapply.
Strydom also argued that the fact that no petroleum licence has been given to any company for those oil blocks to date proves there could be no ulterior motive that caused the minister to act unfairly against Red Soil.
The oil blocks in contention are to the west and north of petroleum exploration licence 104, which TotalEnergies and Petrobras intend to operate.
The oil blocks were previously held by the British company Serica Energy, which decided to exit the block in 2020.
Kaura was formerly Serica Energy’s country manager in Namibia.
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