Namcor appoints Deloitte to manage dilution of its 54% in Kudu

13 Sep 2013 02:40
WINDHOEK, 13 SEP (NAMPA) - Namcor has appointed Deloitte LLP as the lead advisor to manage the farm-out process in respect of the dilution of its 54 per cent stake in the Kudu Gas Project.
The chairperson of the National Petroleum Corporation of Namibia (Namcor)’s Board of Directors, Johannes !Gawaxab made this announcement at a media conference in the capital on Thursday.
“The process of soliciting a strategic partner is expected to take five to seven months to complete. Deloitte is leading the process in Namcor’s stake on the basis of a 70/30 ratio, of which 70 per cent is for sale. Namcor retains 30 per cent of this 54 per cent stake as its final equity in the project,” he explained.
Namcor’s obligation in respect of the 54 per cent shareholding in the Kudu Gas Project under the Joint Operating Agreement and the Gas Sales Agreement is to solicit significant shareholder guarantees (support) both in terms of capital expenditure, operational expenditure and termination risks.
Namcor is meeting its funding obligations through funding of US dollars 3.75 million (about N.dollars 375 million), while the balance of US dollars 11.25 million (about N.dollars 112. 5 million) was sourced from the Ministry of Mines and Energy.
Since the appointment of Deloitte, the Namcor Kudu Team has attended a two-day seminar, where Tullow Oil (operator) presented technical and commercial aspects of the Kudu Project.
At this seminar, Tullow Oil also provided the project partners with all the data for the setting-up of a data room, which will be utilised in the farm-out process.
In addition, update meetings were held with Deloitte as well as with KuduPower/NamPower for the formalisation of the downstream activities and processes.
!Gawaxab emphasised that in meeting this important project obligation, Namcor approached the Ministry of Mines and Energy (MME) and the Ministry of Finance (MoF) for support in respect of parent company or shareholder guarantees.
In meeting the above support, the MoF solicited the services of the African Development Bank (AfDB) in assisting the MoF to unravel the magnitude of guarantees required by Namcor and NamPower, while seeking the best strategy and practical implementation of the required guarantees from the shareholder.
He said once that exercise is completed, Namcor is required to submit a final proposal on its required support to the MME for consideration by Government.
The AfDB, following an assessment of the proposed guarantees, will deliver a final paper to the MoF with its recommendations on the way forward with the Government support package.
A follow-up credit support and guarantees’ workshop held in London in the United Kingdom between Namcor, Tullow Oil and the AfDB primarily considered alternative structures and strategies for the credit support and guarantees with a view to provide the best scenarios to Government.
The benefits of the Kudu Gas Project for Namibia are that gas provides lower-cost power; provides long-term power supply; the Kudu Gas Field size of 800 Mega Watts (MW) matches the electricity needs of the country; it utilises a Namibian resource and brings in revenue for the country rather than creating an import liability; is more environmentally-friendly; and will have a positive impact on the Namibian economy.