Lawmakers slam Namcor’s pittance stake in Recon
OGONE TLHAGE
WINDHOEK
Lawmakers have questioned the National Petroleum Corporation of Namibia’s (Namcor) 10% shareholding in Canadian oil exploration firm Recon Africa.
A series of public hearings have been held by the Parliamentary Standing Committee on Natural Resources over oil and gas exploration in the Kavango East and West regions and the conduct of Recon to date.
Rally for Progress and Development (RDP) member of parliament Mike Kavekotora questioned why Namcor’s shareholding had been capped at only 10%, saying Recon’s value as a company is driven mainly by its interest in Namibia.
“Why did you, from a quantitative perspective, just accept the 10%? That 10%, when you come to the production stage, it will remain 10% and the whole Namibian resource will end up in the hands of a foreign company? So, why do you take that 10% and continue as such,” he asked.
Kavekotora further argued that Recon’s other operations did not create much value when compared to its Namibian licence.
When Recon initially listed on the Toronto Stock Exchange, its company stock was worth only six Canadian pennies (about N$7), but this has risen to C$10 (about N$118) following the acquisition of its Namibian licence as at 27 July 2021.
The company's stock is currently valued at C$877 million (N$10.4 billion) while Namcor's stock is valued at C$87 million (about N$1 billion).
Namibian licence created value
“As much as they have all these licences, the real value was created with this licence, where you only have 10%. Our licence, the value of that licence, is 50% of the total value [of Recon]. It has an intrinsic value,” Kavekotora said.
“Recon is demonstrating that value at the stock exchange was created with a Namibian licence. Look at the six pennies it was on,” he added.
Swanu president Tangeni Iijambo said Recon – and not Namibia - had benefitted from the licence.
“Regardless of having started exploration, Recon Africa is already gaining billions through them being registered with the Toronto Stock Exchange,” he said.
Responding to the queries raised by the lawmakers, Namcor board chairperson Jennifer Comalie said the company has not derived any financial benefits as yet.
“We have not monetised our share. The only way we can monetise our stake is if we sell our share… we are sharing the risk with the other shareholder,” she said.
Could fall drastically
She added that Recon’s value could fall drastically should no commercial oil be discovered in Namibia.
Meanwhile, Namcor asset manager Martin Negonga added that neither the company nor government made any financial contributions to the exploration activities, despite Namcor’s 10% stake.
“In terms of capital investing, since 2015, Namcor or government have spent zero cents on these operations because this is capital that was raised by this company [Recon] that undertakes these operations,” he said.
WINDHOEK
Lawmakers have questioned the National Petroleum Corporation of Namibia’s (Namcor) 10% shareholding in Canadian oil exploration firm Recon Africa.
A series of public hearings have been held by the Parliamentary Standing Committee on Natural Resources over oil and gas exploration in the Kavango East and West regions and the conduct of Recon to date.
Rally for Progress and Development (RDP) member of parliament Mike Kavekotora questioned why Namcor’s shareholding had been capped at only 10%, saying Recon’s value as a company is driven mainly by its interest in Namibia.
“Why did you, from a quantitative perspective, just accept the 10%? That 10%, when you come to the production stage, it will remain 10% and the whole Namibian resource will end up in the hands of a foreign company? So, why do you take that 10% and continue as such,” he asked.
Kavekotora further argued that Recon’s other operations did not create much value when compared to its Namibian licence.
When Recon initially listed on the Toronto Stock Exchange, its company stock was worth only six Canadian pennies (about N$7), but this has risen to C$10 (about N$118) following the acquisition of its Namibian licence as at 27 July 2021.
The company's stock is currently valued at C$877 million (N$10.4 billion) while Namcor's stock is valued at C$87 million (about N$1 billion).
Namibian licence created value
“As much as they have all these licences, the real value was created with this licence, where you only have 10%. Our licence, the value of that licence, is 50% of the total value [of Recon]. It has an intrinsic value,” Kavekotora said.
“Recon is demonstrating that value at the stock exchange was created with a Namibian licence. Look at the six pennies it was on,” he added.
Swanu president Tangeni Iijambo said Recon – and not Namibia - had benefitted from the licence.
“Regardless of having started exploration, Recon Africa is already gaining billions through them being registered with the Toronto Stock Exchange,” he said.
Responding to the queries raised by the lawmakers, Namcor board chairperson Jennifer Comalie said the company has not derived any financial benefits as yet.
“We have not monetised our share. The only way we can monetise our stake is if we sell our share… we are sharing the risk with the other shareholder,” she said.
Could fall drastically
She added that Recon’s value could fall drastically should no commercial oil be discovered in Namibia.
Meanwhile, Namcor asset manager Martin Negonga added that neither the company nor government made any financial contributions to the exploration activities, despite Namcor’s 10% stake.
“In terms of capital investing, since 2015, Namcor or government have spent zero cents on these operations because this is capital that was raised by this company [Recon] that undertakes these operations,” he said.
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