The Minister of Industries, Mines and Energy, Modestus Amutse, in January instructed the Namibia Petroleum Corporation to favour a subsidiary of Swiss-based oil firm Vitol, at the expense of its own profits.
This new detail exposes the minister’s decisions to being part of a pattern that appears to be aimed at cementing the international firms’ hold over the Namibian fuel supply industry.
Apart from ordering the controversial contract extension, Amutse handpicked the international firm and granted it an exclusive three-month single supplier multi-billion dollar contract.
The minister then went on to nullify a Namibia Competition Commission decision barring fuel retailer Nasan Energies (related to Vitol via third parties) from trading with Vitol’s local subsidiaries.
The Issue has learned that Amutse, in January instructed Namcor to extend a lease agreement it had with Vitol subsidiary Validus Energy for an additional six months. Validus Energy has been leasing a part of the national oil storage facility, which is run by Namcor for almost six years.
The lease is believed to have been further extended for a further three months after the initial six months expired in June.
At least three people familiar with the situation said that Namcor was not willing to renew the Validus Energy agreement. This was attributed to the fact that the contract was not in favour of the parastatal and that Validus Energy was allegedly paying about 50% less than the going industry rate.
Validus Energy is a joint venture between Vitol subsidiary Vivo Energy and Namibia’s Millennium Investments Holdings. Millennium is founded by businessman Mathew Hamutenya. Vivo Energy is the parent company responsible for the Shell fuel station brand in Namibia.
Namcor spokesperson Utaara Hoveka two weeks ago said Namcor will not respond to questions about the lease or its extension citing confidentiality. “As a matter of principle and in terms of our commercial agreements, we generally do not comment on commercial arrangements with our partners and suppliers, on account of confidentiality obligations,” read Hoveka’s emailed response to The Issue.
N$7.2 billion exclusive deal
During April, Amutse called a meeting with local oil suppliers. Vitol, Puma and Namcor are all said to have participated. The meeting was to discuss the ongoing war in the middle east and potential supply shortages of fuel as a result. The industry players were allegedly asked to consider adjusting their prices for bulk fuel supply in the country. The Issue understands that one of the major companies undertook that they were willing to bring their bulk prices to N$4 markup on top of the Basic Fuel Price (BFP). The cheapest option brought up in the meeting was allegedly 60 cents markup on the BFP. The said discussion was allegedly the minister’s way of gauging how the local market would respond to the impending fuel shortages in the world market.
On 5 May, the ministry wrote a letter to Harald Schmidt, the chief executive officer of the Namibia Oil Industry Association (NOIA).
The letter was to notify NOIA to source for quotations from its members for bulk fuel supplies for the government.
The letter, written by mines executive director Moses Pakote, was asking for 28.5 million liters of Unleaded petrol and 86 million liters of diesel. It also stated that Namcor was the buyer of the product through the National Energy Fund guaranteed by the government.
The government then awarded the contract to Vitol. Millennium’s founder Hamutenya was quoted in the media saying he had nothing to do with the transaction because the contract was awarded to Vitol Bahrain, an entity he claims is independent from Vitol SA, which is his business partner in Validus. These claims are in direct contradiction to Amutse’s 21 May letter to NOIA’s Schmidt, which clearly states that the exclusive N$7.2 billion, three-month contract to supply fuel to Namibia was awarded to Vitol (SA) Pty Ltd. Also the process was allegedly run outside of the country’s procurement laws.
The exclusive contract drew criticism, with some claiming that it was enabling Vitol’s monopoly and that it was putting Namcor at a disadvantage. Major oil companies feared making losses of millions of US dollars due to the sudden requirement that they had to buy directly from Vitol as far as their Namibian operations are concerned.
Some argued that the reason why the government back in 2010 revoked Namcor’s mandate to bring in 50% of the country’s fuel needs was to curb a monopoly situation making it difficult for independent supplies to be sustainable. Industry players were also quietly questioning the ministry’s legal powers to make such a call.
Amutse and his ministry did not respond to detailed questions sent two weeks ago.
Hamutenya has been quoted in the media denying any wrongdoing or any political powerplays involved in him and his son benefiting from government decisions.
Enters Nasan
The Ministry of Industries, Mines and Energy, early this month took it a notch further by revoking a Namibia Competition Commission (NaCC) decision barring a company belonging to Hamutenya’s son, Nasan Energies, from trading with Vivo Energy, in turn Vitol.
The NaCC had imposed conditions that Nasan be prohibited from trading with Vitol for a period of five years, after it approved Nasan’s purchase of 42 service stations from Vivo energy two months ago.
The NaCC’s decision came as a result of objections placed before it by industry players who feared that the sale of the 42 service stations to Nasan, a new player in the market, would constitute a Vivo Energy (Vitol) monopoly.
This dates back to September last year when an announcement was made that Vivo Energy chose to sell 53 Engen service stations around the country to Nasan Energies. This came from the 2024 international transaction which saw Vivo acquire Engen from Petronas.
However, the NaCC intervened because it determined that should Vivo convert Engen’s 53 service stations into Shell service stations in the country, they could have an unfair market dominance. The NaCC then ordered that Vivo sell the service stations.
The successful bidder chosen by Vivo, however, was new kid on the block, Nasan Energies. A company partly owned by Mathew Hanutenya’s son Miguel. Miguel has also worked as the chief executive officer of his father company Millenium Investment Holdings. The same company that is in partnership with Vivo in the Validus venture.
As a result of Nasan’s proximity to Vitol, the NaCC had ruled this year that Nasan should not buy fuel products from Vitol for a period of five years. It was this decision which Amutse now overruled, which led to observers accusing him of making multiple decisions being deemed to favour the Hamutenyas and in turn Vitol.
