Vena Gemstones and Mining (Pty) Ltd has instituted legal proceedings against Mines and Energy Minister, Tom Alweendo following his refusal to grant the company a Petroleum Exploration License (PEL) in the now considered “oil rich” Orange Basin offshore Namibia.
In documents seen by Business Express, Vena Gemstones and Mining seeks reviewing and setting aside of a decision by Alweendo, communicated on 15 June 2022 and confirmed on 30 June 2023, made in relation to an application submitted by Vena Gemstones and Mining for a Petroleum Exploration License in respect of a half block 2812A in the Orange Basin, offshore of Namibia.
The decision was an outright rejection of the PEL license application and this was done before the much publicised discovery of oil in the Orange Basin, claims Vena Gemstones and Mining.
In an affidavit disposed by the company’s Managing Director, Nangutuwala Kalumbu, he notes that the decision by Alweendo is reviewable on a number of grounds.
“The decision is unlawful and ultra vires section 32 (2) of the Act and that the decision, in addition, violates Vena Gemstones and Mining‘s legitimate expectation to be treated in the same manner as other persons who have applied for multiple blocks and were awarded multiple blocks by Alweendo.
“Alweendo did not apply his mind to the facts and in particular did not have regard to the fact that in total Vena Gemstones and Mining ‘s application was for two (2) half blocks and was therefore as a matter of fact for a single block.
“Alweendo acted unfairly and unreasonably in not considering half block 2812A despite having been the first applicant to have applied for the block,” decries Kalumbu before the Courts.
BONE OF CONTENTION
On 22 February 2022, Vena Gemstones and Mining lodged an application for a PEL in respect of half Block 2712A and half Block 2812A with the mines and energy ministry as contemplated by section 11 (1) (a) of the Act.
At the time, Vena Gemstones and Mining made its application for the PEL, oil of commercial value had not been discovered on blocks 2913A 39, 29148 39, 29138 and 2912 91 which are directly connected to, and which directly border half block 2812A.
“At that time, half block 2812A was an open block and was not subject to any application. Vena Gemstones and Mining’s application was therefore the first application to be allocated a PEL in respect of half block 2812A.
On 15 June 2022, the Vena Gemstones and Mining received a letter from Alweendo.
“The decision announced on 15 June 2022 and confirmed on 30 June 2023 is ultra vires section 32 (2) of the Act and as a result violates the principle of legality and should be set aside. The decision violates the legitimate expectation created in the Applicant’s mind by way of Alweendo’s practice of awarding more than one block to a single Applicant,” he said.
Kalumbu said that they had a legitimate expectation to be treated in the same manner as all the other entities have been treated that have been allocated more than one block by Alweendo.
“I note that Alweendo being an administrative decision maker as contemplated by Article 18 of the Constitution is obligated to treat all applicants in a similar manner. The Applicant has not been treated in a similar manner to the entities that have received more than one block.
“Further, Alweendo ought to have at the very least given the Applicant a hearing prior to making his decision, this is more so in view of the facts I have set out in relation to the proximity of half block 2812A to the oil discovery. The half block 2812A is directly next to the blocks where commercial quantities of oil have been discovered,” said Kalumbu.
The half block 2812A is plainly more likely to have commercial quantities of oil located on it.
“Vena Gemstones and Mining had a residual common law right to make an election as to which half block it desired to be considered for as it was the applicant. This is in the event that Alweendo could limit awards of licences’, which is denied. Alweendo could not make the election on behalf of Vena Gemstones and Mining as that conduct does not lead to accountability, fair dealing and transparency.
“Vena Gemstones and Mining believes to be the best evaluated company in relation to the evaluation that took place in respect of half block 2812A. In the circumstances, the decision not to award half block 2812A to the Applicant is unfair, unreasonable, not transparent, does not bode well for accountability and is as a result ultra vires Article 18 of the Constitution,” further states Kalumbu.
The mines and energy ministry has also notified the court of its intention to defend the case.
Namibia holds about 11 billion barrels of oil in recently discovered offshore fields, with TotalEnergies’ Venus-1X find making up almost half of the total. Namibia, which has not produced any oil or gas yet, has become a global exploration hotspot after deep water discoveries by Shell and TotalEnergies over the last two years. Oil companies including Chevron, ExxonMobil and Galp Energia are also conducting exploration and appraisal activities.