Oil and gas companies routinely announce their intention to farm into petroleum licences before regulatory approval is granted, particularly where state-owned or publicly listed companies are involved, and stock-exchange disclosure rules apply.
Such announcements are standard industry practice and are almost always made on a conditional basis, pending the completion of statutory approval processes in the host country.
This context is essential to understanding the recent announcement by TotalEnergies and Petrobras regarding a commercial agreement over Petroleum Exploration Licence (PEL) 104 offshore Namibia, which has generated confusion about whether the transaction is already legally effective.
TotalEnergies said it had signed agreements to acquire a 42.5% operated interest in PEL 104, with Petrobras expected to acquire a 42.5% non-operated interest. Under the proposed structure, Namcor would retain its 10% carried interest, while Eight Offshore Investments Holdings would hold the remaining 5%.
TotalEnergies is intended to assume operatorship if the transaction is approved.
PEL 104 is located offshore Namibia in the Lüderitz Basin and covers approximately 11,000 square kilometres.
In its announcement, TotalEnergies explicitly noted that the transaction is subject to customary regulatory approvals and the consent of the joint venture partners.
That qualification reflects how Namibia’s petroleum licensing system operates in law.
A commercial agreement between companies does not, in itself, change the legal status of a petroleum licence. Such agreements are a recognised first step in oil and gas transactions, allowing parties to agree on equity interests, funding commitments, work programmes and operatorship before engaging regulators. They remain conditional until the competent authority grants approval.
Against this backdrop, a statement issued by the Presidency over the weekend said Namibia would not recognise the TotalEnergies–Petrobras transaction until the companies followed the proper statutory procedure under the country’s petroleum law.
Presidential spokesperson Jonas Mbambo said that “no transaction can be recognised or considered valid” unless a formal application is submitted and the prescribed statutory process is completed.
He further stated that the Ministry of Industries, Mines and Energy was not notified in advance of the announcement and only became aware of it shortly before it was made public.
While the Presidency’s statement correctly restates the law, it enters a space ordinarily occupied by the regulatory process rather than political clarification. Under the Petroleum (Exploration and Production) Act of 1991, as it currently stands, the competent authority in matters such as PEL 104 is not the Presidency but the Minister of Mines and Energy.
Legal authority to approve licence transfers, changes in operatorship and amendments to petroleum agreements is vested in the Minister and must be exercised formally and in writing.
Applications are administered through the Ministry, working under the Petroleum Commissioner and supported by technical, legal and financial assessments. Companies proposing a transaction, such as the PEL 104 farm-in, are required to submit a formal application, which is evaluated for technical competence, financial capacity, compliance with licence terms, and alignment with the national petroleum policy before a recommendation is made to the Minister.
The Act does not prescribe fixed timelines for this process. Approvals may take weeks or months, depending on the complexity of the transaction and the completeness of the application.
Public announcements should therefore not be interpreted as indicators of regulatory timing or outcome.
In this light, the issue at hand is one of sequencing rather than legality.
TotalEnergies and Petrobras are entitled to announce a conditional commercial agreement, particularly given their status as listed and state-owned entities.
At the same time, Namibia’s petroleum law draws a clear distinction between commercial intent and legal effect.
Until a formal application is lodged with the Ministry and the Minister grants written approval, the licence remains legally unchanged.
Operatorship does not transfer, equity interests do not change, and no new party acquires legal rights or obligations under PEL 104.
Namcor’s position likewise remains unchanged unless and until an approved amendment provides otherwise.
Proposed amendments to the Petroleum Act, which would transfer certain powers to the Presidency and establish an Upstream Petroleum Unit in the Office of the President, are currently before Parliament.
However, proposed legislation has no legal force until it is passed, assented to and brought into operation. Until then, all petroleum transactions continue to be governed by the existing law.
This is why the PEL 104 announcement can be commercially accurate while remaining legally incomplete.
In Namibia’s petroleum framework, companies may agree and disclose their intent, but the legal effect follows regulatory approval, not a corporate announcement.
