Namcor saves N$22 million through cost optimisation

The National Petroleum Corporation of Namibia (Namcor) has been able to save N$22 million by streamlining operations this year.

In a media statement issued on Tuesday, Namcor spokesperson Paulo Coelho says the company has implemented several operational improvements to streamline operations, reduce redundancies and improve coordination across the business.

“Cost optimisation initiatives have saved N$22 million in 2024,” says Coelho.

The company also renegotiated contracts with key suppliers, which has allowed it to increase its competitiveness, he adds.

“The renegotiation of key supplier contracts, including a revised basic fuel price (BFP) agreement, has allowed Namcor to achieve economies of scale and increase its competitiveness.”

The renegotiated terms are projected to increase gross margins by N$15 million over the next 12 to 18 months, he says.

The company has also been able to pay half (N$550 million) of the N$1.1 billion it owes the international oil and commodities company, the Gunvor Group.

“A down payment of N$550 million was made to Gunvor, restoring Namcor’s financial credibility and strengthening relationships with trading partners.”

The payment was made after a N$1.2 billion sovereign guarantee in April after the national oil parastatal made a N$700 million loss in the 2022/23 financial year.

A sovereign guarantee means that if Namcor defaults on its debt, the government will step in and cover the cost.

Coelho says the company has also implemented consequence management measures to address internal misconduct.

“Legal proceedings have been initiated against former employees involved in misconduct and several key positions have undergone disciplinary action,” he notes.

Moreover, the company is refocusing efforts on upstream opportunities, particularly with the recent offshore oil discoveries in Namibia.