Botswana Oil decry BERA ruling

SHARE   |   Wednesday, 24 October 2018   |   By Keiteb E Kgosikebatho
Tshekedi Tshekedi

Members of the Parliamentary Committee on Statutory Bodies and Public Enterprises have poured scorn on the decision by Botswana Energy Regulatory Board (BERA) to decline issuing an exclusive license for importation of petroleum products to Botswana Oil.

Botswana Oil Acting Chief Executive Officer Meshack Tshekedi told the committee that BERA rejected their application despite them submitting strong reasons to justify their move. Among the reasons given by BERA for declining the application, Tshekedi said, was that Botswana Oil was not technically ready for the importation mandate. “We applied for the license and we made it very clear that we do not wish to put the country in jeopardy from day one by jumping to 100% importation of petroleum products. So we initially asked for 50 percent of the volume requirements and then said from there, the principals can satisfy themselves in our capability to handle the importation,” Tshekedi said.

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According the Acting CEO, another reason given by BERA was that Botswana Oil was not financially capable of handling the mandate. “According  BERA, their interpretation was that when they assessed our capability for the 100 % importation one of the areas they highlighted was that we do not have enough storage. This is despite the fact that the International  Oil Companies (IOCs) are only able to provide the country’s requirements with a storage capacity of 18.8 million litres while  we have at our disposal a government storage amounting to up to 62 million litres so in our view the technical incapability due to storage didn’t really hold ground,” said Tshekedi.

Adding that in their view as Botswana Oil they felt they were ready, and in terms of technical capability, Tshekedi explained that majority of staff members were recruited to execute the 100 % importation and have the right skills and perspectives. And in terms of their financial capability; he said there was some misunderstanding because government has since converted the loans (the latter had given Botswana Oil P20 million at inception ) to equity and with the introduction of security of supply, in their view there was enough funding for infrastructure development required. “So we are not quite in agreement that we are not technically ready,” he said.

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All the same, the National Oil Company’s plea did not fall on deaf ears as members of committee vowed to support them in their next attempt to be issued with an exclusive license. “I think  government was reluctant to give you the exclusive license for selfish reasons  because basically speaking you are a strategic institution and the national petroleum strategy  and others to do with petroleum are supposed to be under you, ” said Gabane/ Mmankgodi MP Pius Mokgware.

He urged Tshekedi to push on and to ensure that they achieve their strategic direction in delivering their mandate. “You should be controlling the national petroleum that is why the DIS is so corrupt, now the ones in control but those things are supposed to come to you not the DIS. The national petroleum fund is supposed to be part of you, so go out there and benchmark,” he said.

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For his part Gaborone Central MP Dr Phenyo Butale said the reasons why Botswana Oil was not issued with the exclusive license by BERA need to be re-looked at. “I was thinking that if there was a concern around readiness or preparedness to discharge the mandate as per the license, BERA as a regulator could have instructed you to take steps to get you ready instead of declining. I think it is a bit worrisome and I think we need to call BERA back and have a conversation around that. This is the stance of the committee to say to look away from the reasons of your existence,” said Dr Butale.

Tshekedi pleaded with government to assist in fast tracking the enactment of the Petroleum Products Act which will recognise the existence of the NOC and anchor its importation mandate, because in the absence of an exclusive license they have to explore other business models, and also that should this be the case because going into commercial/retail market where funding is required the other support he said would be to support them with initial capitalisation to allow them into the sector. “We need to quickly catch up and garner enough volumes for Botswana to have some level of control in the sector so that we ensure the security of supply,” said Tshekedi. 



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