Fuelling Tension: Retailers caught in the crossfire of the Vivo/Engen mergerAugust 25, 2025

YANNA SMITH

The local takeover of Engen by Vivo Energy Namibia appears to not be going as smoothly as the lubricants it sells. This comes after the Namibian Competition Commission (NaCC) granted Vitol Emerald Bidco conditional approval in October 2023 to acquire Engen Limited, related to an international transaction where Vitol acquired 74% of Petronas. The Commission has been very clear over its concerns regarding competition issues and impacts on employment.

In essence, the NaCC said the service stations must be divested to a Namibian-owned undertaking or consortium with the purchaser owning less than 10% of the retail service stations in Namibia at the time of purchase. This restriction was in place until May 21, 2025, after which it relaxed, allowing broader potential purchasers. Properties, leases, and associated retail supply agreements for various station types are included in the divestment. In addition to the divestiture, the NaCC imposed further conditions related to local beneficiation with the merger requiring conditions to ensure local economic benefit and moreover, the merged entity must not negatively impact employment.

The NaCC approved the merger with these conditions to ensure it did not substantially lessen competition or negatively affect the public interest in Namibia.

But something is rotten in Denmark.

Kosmos 94.1 is in possession of countless emails from fuel retailers voicing concerns over several issues, including the vast differences between Engen and Shell’s rental agreements. Engen offered a five-year contact with a five-year renewal where Shell offers a three-year contract with a five-year renewal.

There are complex forecourt levies and rentals, the same between the two brands, but Shell has added a throughput fee. The fee is calculated by multiplying the total litres of fuel the station sold the previous month by retailer’s margin, currently at N$2.22 per litre and taking 8% of that as the fee Vivo charges the service station.

A simple calculation of 250 000 litres sold will increase the forecourt rental from the old N$15 000 (excl. VAT) to N$59 400 (excl. VAT).

What irks the retailers is that every time their margin is increased by government, Vivo takes 8% of that.

The shop and take-away, and car wash rentals are also unclear, once the conversion of the infrastructure is done, and the only guarantee is that it will be either the same or higher than what Engen charged. In addition, the Shell rental contract has a new premises rental. The actual figures are still to be “negotiated” but insiders say it will likely be around N$20 000 to N$30 000 per site as it is calculated as the size of the shop (in m²) multiplied by the price per m².

These enhanced rentals, coupled with the minimum wage, pose a great challenge for retailers to retain jobs.

The retailers also say that the NaCC erred in using sites as a measure of fair competition instead of fuel volumes sold.

Retailers are understandably reluctant to sign these contracts which they describe as unilaterally changed. According to Lazarus Nafidi, Corporate Communications Manager for Vivo Energy Namibia: “There has been no unilateral change to contracts. As part of the agreed divestment process, which has been imposed by the NaCC, certain site agreements will be assigned or novated to the new acquirer, as approved by the NaCC, in line with contractual and legal requirements.

“All divestment sites remain on their existing contracts. Engen sites coming into the Vivo Energy network have been aligned with Vivo Energy’s internal policies, operational standards, and brand requirements. No formal award has yet been made to any party. All dealers, including those at divestment sites trading under either the Shell or Engen brands, have been informed of the process, the current status, and the deadlines under which we are working. Until the transfers are finalised, Vivo Energy remains the contracting party and continues to honour its obligations under existing agreements.”

Vivo Energy currently operates 75 Shell service stations and has acquired 58 Engen sites. According to the NaCC, a total of 58 sites must be divested, irrespective of whether they are Shell or Engen branded.

The first divestment period, which concluded on 21 May this year, restricted these divestitures to Namibian-owned undertakings or consortia with less than 10% of the retail service stations in Namibia. The second period, which ends in November, has more relaxed conditions, allowing for a broader range of potential purchasers.

Currently Vivo supplies all 133 service stations with fuel, which some retailers say is deliberate, accusing Vivo of deliberately slowing down the divestment process and making millions without having to invest a cent in infrastructure.

According to Nafidi: “The divestment process is a complex one, involving regulatory approvals, landlord consents, and contractual arrangements for each of the individual sites. This complexity is further compounded by bid reviews, asset verification processes, and the need to align multiple stakeholder interests. We are working through these diligently to ensure a smooth and compliant transition for all parties involved.”

He adds that it is Vivo’s “intent to comply with the timeframes imposed by the NaCC and complete the divestment by end of November. In the meantime, we remain committed to supporting the dealers in our network and will continue to provide maintenance support to ensure operational continuity and a positive customer experience.”

Kosmos 94.1 is in possession of a formal complaint to the NaCC where specifically Vivo’s forecourt rental charges and other levies are noted. Dated 10 July this year, the Commission undertook to engage the merged entity on those issues and to determine whether they are in fact in contravention of the Commission’s conditions.

But there is another concern. Retailers inform Kosmos 94.1 that ‘word on the street’ has it that Millennium Investment Holdings and/or Nasan Energies will become the wholesale supplier of fuels to the 58 divested sites. The NaCC declined to answer any questions by Kosmos 94.1 saying, “…the Commission is of the view that it cannot pronounce itself on the subject at hand until it can provide a substantive statement in this regard after the completion of its compliance monitoring processes.”

On the possible appointment of Millennium and/or Nasan, Nafidi said no final decision has been made by Vivo.

“No formal decision has yet been made regarding the wholesale supply arrangements for the divestment sites. As required by the NaCC-imposed divestment process, the appointment of any new wholesaler will follow the necessary regulatory and contractual steps.

“These sites, whether trading under the Shell or Engen brands, will only transition to the new acquirer, as approved by the NaCC, once all approvals and transfer arrangements are complete. Until then, Vivo Energy continues to supply fuel to these sites and remains committed to supporting operational continuity for dealers and customers alike.”

But there appears to be some conflicts.

Millennium Power, a subsidiary of Millennium Investment Holdings, holds 30% in Validus Energy, in a joint venture with Vitol Energy (SA) Ltd. Vitol Energy owns 100% of Vivo Energy which operates Shell in Africa.

According to Millennium’s website: Validus services wholesale customers in the Namibian market including supply to Vivo, a Vitol affiliated downstream distribution company with a material share in the Namibian market.”

Miguel Hamutenya is the CEO of Millennium Investment Holdings and the Regional Executive Manager of Validus Energy.

Millennium did not respond to questions.

Enter Nasan Energies. According to the company’s file at Bipa, Nasan is a petroleum and energy company concerned with trading and distribution. Nasan was registered on 11 December 2024, changing its name from Dark Bronze Investments. Miguel Hamutenya is a director of Nasan as well as a beneficial owner.

The appointment of either of these two companies, or both, as the wholesale supplier of fuel to the divested sites, is still unconfirmed.

yanna@kosmos.com.na