Parliament reprimands ReconAfrica for taking shortcuts
Canadian company Reconnaissance Energy Africa (ReconAfrica) will face fines for disregarding Namibian laws and procedures during its oil exploration in the Kavango East and West regions.
The company, which has been exploring the area since January 2021, could be ordered to pay up to N$4 000 for violating the Communal Land Reform Act. The fine for drilling holes without necessary permits - in terms of the Water Resources Management Act - will still be determined by the relevant minister.
These were some of the recommendations Parliamentary Standing Committee on Natural Resources chairperson Tjekero Tweya highlighted recently. The committee's recommendations were included in an in-depth report following an investigation into ReconAfrica's oil search in the country.
The former minister referred to the company's disregard for Namibian laws and regulations as “questionable”, and said it is not to the benefit of the state, while the company generates value from Namibian resources.
"Based on the value of their shares on the stock exchange, they generate income using Namibia's resources," Tweya said.
Meanwhile, state-owned National Petroleum Corporation of Namibia’s (Namcor) 10% share in the exploration project does not generate any revenue for state coffers.
Massive growth
Tweya said ReconAfrica's shares went for US$0.06 per share in January 2015, when the company was worth only US$9.6 million (N$152 million at yesterday’s exchange rate). By this month, the combined value of ReconAfrica's shares stood at US$1.7 billion (N$26.9 billion).
Namcor's stake will only earn dividends after production - if oil is ever found in commercially viable quantities. Until then, the agreement is merely for show, he said.
Tweya and the 28 members of the committee visited test boreholes on remote sites, consulted relevant communities, approached rural authorities and ministry officials, and asked the company for proof.
According to him, the committee was able to establish that ReconAfrica had already started its operations in January 2021, but only obtained the first permission from the relevant traditional authorities in March.
"The approval letters were an afterthought for ReconAfrica," he said.
Furthermore, traditional leaders have complained that government had already approved exploration before residents and communities were even consulted.
The company was not allowed to undertake hydraulic fracturing (fracking) in Namibia; a plan ReconAfrica later denied.
The Canadian company did, however, drill boreholes without legal permits, long before permits were obtained in June 2021.
It also built roads while its environmental management plan did not provide for this.
This plan was also not made available to stakeholders.
At least one concerned family has approached the courts to protect their violated land rights. ReconAfrica took over their land without any valid leases, and agreements to reimburse them for access to their mahangu fields have not been honoured, they said.
Who approved this?
"The question is who gave approval to ReconAfrica to continue despite the fact that legal requirements, such as obtaining permission, water permits and leases, had not been complied with? The committee could not determine who instructed it to proceed.
"Neither ReconAfrica nor the approached government offices, ministries and agencies wanted to divulge this information," Tweya said.
The investigation into the company’s oil search was launched as a result of three petitions in which the Save The Kavango's Unique Lifestyle and Fridays for Future Windhoek as well as 52 other civic organisations demanded a ban on fracking, the conservation of water resources and the suspension of oil exploration in the Okavango Delta.
On this issue, the committee found that ReconAfrica was not drilling into the sensitive delta and, therefore, did not recommend stopping the oil search.
The company has already spent US$40 million (N$633.6 million) on the project, US$14.3 million (N$226.5 million) of which was spent within Namibia, with about N$25 million having flowed into state coffers.
It has further drilled boreholes for various communities and has reportedly created more than 500 jobs in the two Kavango regions, according to the report.
"The majority of traditional authorities are eager for the development and revenue that will follow if the company does discover oil," Tweya said.
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The company, which has been exploring the area since January 2021, could be ordered to pay up to N$4 000 for violating the Communal Land Reform Act. The fine for drilling holes without necessary permits - in terms of the Water Resources Management Act - will still be determined by the relevant minister.
These were some of the recommendations Parliamentary Standing Committee on Natural Resources chairperson Tjekero Tweya highlighted recently. The committee's recommendations were included in an in-depth report following an investigation into ReconAfrica's oil search in the country.
The former minister referred to the company's disregard for Namibian laws and regulations as “questionable”, and said it is not to the benefit of the state, while the company generates value from Namibian resources.
"Based on the value of their shares on the stock exchange, they generate income using Namibia's resources," Tweya said.
Meanwhile, state-owned National Petroleum Corporation of Namibia’s (Namcor) 10% share in the exploration project does not generate any revenue for state coffers.
Massive growth
Tweya said ReconAfrica's shares went for US$0.06 per share in January 2015, when the company was worth only US$9.6 million (N$152 million at yesterday’s exchange rate). By this month, the combined value of ReconAfrica's shares stood at US$1.7 billion (N$26.9 billion).
Namcor's stake will only earn dividends after production - if oil is ever found in commercially viable quantities. Until then, the agreement is merely for show, he said.
Tweya and the 28 members of the committee visited test boreholes on remote sites, consulted relevant communities, approached rural authorities and ministry officials, and asked the company for proof.
According to him, the committee was able to establish that ReconAfrica had already started its operations in January 2021, but only obtained the first permission from the relevant traditional authorities in March.
"The approval letters were an afterthought for ReconAfrica," he said.
Furthermore, traditional leaders have complained that government had already approved exploration before residents and communities were even consulted.
The company was not allowed to undertake hydraulic fracturing (fracking) in Namibia; a plan ReconAfrica later denied.
The Canadian company did, however, drill boreholes without legal permits, long before permits were obtained in June 2021.
It also built roads while its environmental management plan did not provide for this.
This plan was also not made available to stakeholders.
At least one concerned family has approached the courts to protect their violated land rights. ReconAfrica took over their land without any valid leases, and agreements to reimburse them for access to their mahangu fields have not been honoured, they said.
Who approved this?
"The question is who gave approval to ReconAfrica to continue despite the fact that legal requirements, such as obtaining permission, water permits and leases, had not been complied with? The committee could not determine who instructed it to proceed.
"Neither ReconAfrica nor the approached government offices, ministries and agencies wanted to divulge this information," Tweya said.
The investigation into the company’s oil search was launched as a result of three petitions in which the Save The Kavango's Unique Lifestyle and Fridays for Future Windhoek as well as 52 other civic organisations demanded a ban on fracking, the conservation of water resources and the suspension of oil exploration in the Okavango Delta.
On this issue, the committee found that ReconAfrica was not drilling into the sensitive delta and, therefore, did not recommend stopping the oil search.
The company has already spent US$40 million (N$633.6 million) on the project, US$14.3 million (N$226.5 million) of which was spent within Namibia, with about N$25 million having flowed into state coffers.
It has further drilled boreholes for various communities and has reportedly created more than 500 jobs in the two Kavango regions, according to the report.
"The majority of traditional authorities are eager for the development and revenue that will follow if the company does discover oil," Tweya said.
[email protected]
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