ReconAfrica

Last updated
Reconnaissance Energy Africa Ltd.
ReconAfrica
Type Public
ISIN CA75624R1082
IndustryOil and gas exploration
Founded2014
Founder
  • Craig Steinke
  • Jay Park
Headquarters Calgary, Alberta
Key people

Reconnaissance Energy Africa Ltd., operating as ReconAfrica, is a Canadian oil & gas exploration company that operates in the Kavango in Namibia and Botswana. Headquartered in Calgary, it was co-founded by Craig Steinke and Jay Park in Vancouver. Its CEO is Scot Evans. [1] ReconAfrica is publicly traded on the TSX Venture Exchange and the Frankfurt Stock Exchange.

Contents

Operations and history

Co-founder Craig Steinke reportedly accessed a global dataset of potential undeveloped oil-and-gas sites and, knowing that an old well had been drilled nearby in 1964, Steinke leased the lands in early 2014. [1]

ReconAfrica is licensed to explore a 13,200-square-mile region in the Kavango Basin in Namibia and Botswana, which is home to more than 200,000 people and vital elephant migratory routes. [2] The region, in northwestern Botswana and northeastern Namibia, is adjacent to two national parks and two UNESCO World Heritage Sites. [1] UNESCO has expressed concern about the proximity of ReconAfrica's exploration sites to its heritage sites. [3] Given ReconAfrica's site's proximity to the Omuramba-Omatako river, concerns have also been raised about the possible impacts of oil-and-gas exploration and production on the water quality in the relatively water-scarce area. [4]

ReconAfrica's contract with the Namibian government and its state-owned oil company, NAMCOR, prescribes that it will drill three wells to determine whether there are significant oil reserves in the region. [1] ReconAfrica holds a 90% stake in that exploration license, with NAMCOR holding the remaining 10%. [5] ReconAfrica is subjected to a 5% royalty fee and a 35% corporate tax by the Namibian government. [4]

ReconAfrica drilled its first well in January 2021 and its second on May 5, 2021. [1]

In 2021, ReconAfrica moved its offices from Vancouver to Calgary. [6]

In May 2021, ReconAfrica claimed that it could generate some 100 billion barrels of oil and gas from its site in Namibia and Botswana—which is roughly equivalent to the proven oil reserves of Kuwait or the United Arab Emirates. [5]

In 2021, U.S. Senator Patrick Leahy (D-VT) and Congressman Jeff Fortenberry (R-NE) called for a scrutiny of ReconAfrica's activities in Namibia by the U.S. Securities and Exchanges Commission. [1]

On August 5, 2021, ReconAfrica and partner NAMCOR released a report claiming 350 metres of hydrocarbon showings from the second test well, in addition to the 250 metres found from the first well. [7]

On October 14, 2021, Prince Harry and Reinhold Mangundu co-wrote an opinion article in the Washington Post that condemned ReconAfrica's exploratory activities. [8]

In 2022, ReconAfrica provided N$1.2 million worth of scholarships to ten Namibian students from the Kavango East and Kavango West regions. [9]

Stock promotions

On January 14, 2020, the value of shares in ReconAfrica increased by 40%. ReconAfrica denied knowing of a reason for this surge in trading, but later revealed—at the request of the Investment Industry Regulatory Organization of Canada—that it had paid CA$120,000 to a German media company for a stock promotion campaign. One of the articles that was funded by ReconAfrica compared their stock to a winning lottery ticket. [6]

On June 4, 2021, a complaint was filed with the British Columbia Securities Commission, alleging that ReconAfrica had not adequately disclosed that it changed its business model after the Namibian government prevented it from engaging in fracking. [6]

On October 25, 2021, a class-action lawsuit was filed against several ReconAfrica executives in the United States on behalf of individuals or entities who bought shares in ReconAfrica between February 28, 2019 and September 7, 2021. The lawsuit alleged that ReconAfrica engaged in "stock pumping". [10]

According to Viceroy Research; Haywood Securities’ 2020 report ‘Chasing a giant oil resource in onshore Namibia‘ does not disclose that Sproule gave the exploration less than a 4 percent chance of success. but talks about massive potential and quotes 'source rock specialist’ Dan Jarvie as estimating 100 plus billion barrels of oil with no evidence to support such an estimate and without disclosing that Jarvie is a shareholder and insider of ReconAfrica. Haywood assigned the prospect of success at 27 percent without any justification. [11]

A May 2021 article by National Geographic article revealed that the company was estimating future revenues based on fracking, which it has no licence for. While telling the Namibian public that fracking was not their intention, the company based their estimates on the Sproule Report which said the target was "Unconventionals" [12]

Controversies

Jay Park, ReconAfrica's chair, has been described as having been instrumental in establishing a close relationship with the Namibian Ministry of Mines and Energy, although in a 2015 report, a United Nations monitoring group alleged that he had a conflict of interest as he was then a legal advisor as Somalia's Ministry of Petroleum and Mineral Resources. The report also tied Park to a 2011 incident wherein his lawyers helped transfer a US$2-million payment from Griffiths Energy International Inc. to a company owned by the wife of the ambassador to Chad, which led to a bribery investigation by Canada's national police force. [1]

In 2021, a Namibian organization, Frack-Free Namibia, accused the company's 2D seismic surveying—which entails repeatedly thumping the ground with accelerated weights—has caused "permanent structural damage" to nearby homes. Frack-Free Namibia claims that ReconAfrica operated within 30 metres of homes—allegedly disregarding the 0.5–1 km buffer zone that is prescribed in their environmental impact assessment. [13]

ReconAfrica has obtained the services of Knowledge Katti, a controversial Namibian businessman who is described as having a close relationship with high-ranking government officials, including the president. ReconAfrica has reported that Katti is no longer affiliated with the company. [1]

An April 2021 lawsuit was filed on behalf of a local farmer in Namibia's High Court, alleging that ReconAfrica had cleared land for drilling without properly consulting or compensating local residents. [14]

The company’s EIA assessor conducted ‘consultations’ in English only, which was filled with technical jargon. The negative effects of the project were never shared with those in the licence area and the potential negative consequences have never been shared with communities. The consultant insulted opponents calling them stupid and racist and advised them to buy shares. He then threatened them with legal action for disclosing the personal attacks. [15]

The company’s EIA has been criticised by international organizations such as the IUCN [16] and UNESCO who cautioned against allowing ReconAfrica to proceed on the basis of this incomplete and flawed document. Experts have pointed to shortcomings such as: A lack of physical assessments of fauna and flora and the possible effects on local communities, on archaeological sites, and on groundwater and surface water. The assessment, consisting only of desktop studies without any fieldwork. The assessment left out key assessments and specialist studies. The EIA has not identified alternatives to oil and gas extraction. Water needs for the first wells are missing. [17]

In February 2022, ReconAfrica was accused of cutting through a virgin forest within environmental conservancy boundaries. [18]

Kapinga Kamwalye Community Conservancy chairperson alleged that on 18 June, at a Farmers Union meeting, ReconAfrica's spokesperson showed him that she had access to his private WhatsApp messages, he told The Namibian. The chairperson said he reported the incident at the Rundu Police Station on 28 June. [19]

Then Chairperson of the Kavango East and West community Association and a pair of human rights activists were detained for six hours at the Rundu Police Station, allegedly at the request of ReconAfrica. The police accused Muyemburuko and the activists of misinforming the public and polarising communities through their activism against the Canadian company. [20]

The police searched Muyemburoko’s phone without a warrant and detained him until seven in the evening without charge. The Police went through his private messages

On Tuesday February 21, 2023 Conservancies and Civil Society Organisations in Namibia held a protest against communities being forced to pay legal costs for challenging ReconAfrica's ECC. [21]

Related Research Articles

<span class="mw-page-title-main">Kavango Region</span> Former Region in Namibia

Kavango was one of the thirteen regions of Namibia until it was split into the Kavango East and Kavango West Regions in 2013. Its capital was Rundu.

<span class="mw-page-title-main">Okavango River</span> Major river in southern Africa

The Okavango River, is a river in southwest Africa. It is known by this name in Botswana, Cubango in Angola, and Kavango in Namibia. It is the fourth-longest river system in southern Africa, running southeastward for 1,600 km (1,000 mi). It begins at an elevation of 1,300 metres (4,300 ft) in the sandy highlands of Angola. Farther south, it forms part of the border between Angola and Namibia, and then flows into Botswana. The Okavango does not have an outlet to the sea. Instead, it discharges into the Okavango Delta or Okavango Alluvial Fan, in an endorheic basin in the Kalahari Desert. The Cuito River is a major tributary.

<span class="mw-page-title-main">Okavango Delta</span> River delta in Botswana

The Okavango Delta in Botswana is a vast inland delta formed where the Okavango River reaches a tectonic trough at an altitude of 930–1,000 m in the central part of the endorheic basin of the Kalahari. It is an UNESCO World Heritage Site as one of the few interior delta systems that do not flow into a sea or ocean, with a wetland system that is largely intact. All the water reaching the delta is ultimately evaporated and transpired. Each year, about 11 cubic kilometres (2.6 cu mi) of water spreads over the 6,000–15,000 km2 (2,300–5,800 sq mi) area. Some flood waters drain into Lake Ngami. The area was once part of Lake Makgadikgadi, an ancient lake that had mostly dried up by the early Holocene.

<span class="mw-page-title-main">Sonatrach</span> Oil and gas company of Algeria

Sonatrach is the national state-owned oil company of Algeria. Founded in 1963, it is known today to be the largest company in Africa with 154 subsidiaries, and often referred as the first African oil "major". In 2021, Sonatrach was the seventh largest gas company in the world.

ǃKungKUUNG (ǃXun), also known as Ju, is a dialect continuum spoken in Namibia, Botswana, and Angola by the ǃKung people, constituting two or three languages. Together with the ǂʼAmkoe language, ǃKung forms the Kxʼa language family. ǃKung constituted one of the branches of the putative Khoisan language family, and was called Northern Khoisan in that scenario, but the unity of Khoisan has never been demonstrated and is now regarded as spurious. Nonetheless, the anthropological term "Khoisan" has been retained as an umbrella term for click languages in general.

<span class="mw-page-title-main">Kalahari Basin</span> African endorheic basin

The Kalahari Basin, also known as the Kalahari Depression, Okavango Basin or the Makgadikgadi Basin, is an endorheic basin and large lowland area covering approximately 725,293 km2 - mostly within Botswana and Namibia, but also parts of Angola, South Africa, Zambia, and Zimbabwe. The outstanding physical feature in the basin, and occupying the centre, is the large Kalahari Desert.

<span class="mw-page-title-main">Pharos Energy</span>

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The Kudu gas field is an offshore gas field in Namibia approximately 170 kilometres (110 mi) north-west from the town of Oranjemund. It is located in the Orange Sub-basin in 170 metres (560 ft) of water.

<span class="mw-page-title-main">Bakken formation</span> Geological rock formation known for crude oil and gas production

The Bakken Formation is a rock unit from the Late Devonian to Early Mississippian age occupying about 200,000 square miles (520,000 km2) of the subsurface of the Williston Basin, underlying parts of Montana, North Dakota, Saskatchewan and Manitoba. The formation was initially described by geologist J. W. Nordquist in 1953. The formation is entirely in the subsurface, and has no surface outcrop. It is named after Henry O. Bakken (1901–1982), a farmer in Tioga, North Dakota, who owned the land where the formation was initially discovered while drilling for oil.

<span class="mw-page-title-main">Dciriku language</span> Bantu language spoken in southern Africa

Gciriku, or Dciriku, is a Bantu language spoken by 305,000 people along the Kavango River in Namibia, Botswana and Angola. 24,000 people speak Gciriku in Angola, according to Ethnologue. It was first known in the west via the Vagciriku, who had migrated from the main Vamanyo area and spoke Rugciriku, a dialect of Rumanyo. The name Gciriku remains common in the literature, but within Namibia the name Rumanyo has been revived. The Mbogedu dialect is extinct; Maho (2009) lists it as a distinct language, and notes that the names 'Manyo' and 'Rumanyo' are inappropriate for it.

Kavango–Zambezi Transfrontier Conservation Area is the second-largest nature and landscape conservation area in the world, spanning the international borders of five countries in Southern Africa. It includes a major part of the Upper Zambezi River and Okavango basins and Delta, the Caprivi Strip of Namibia, the southeastern part of Angola, southwestern Zambia, the northern wildlands of Botswana and western Zimbabwe. The centre of this area is at the confluence of the Zambezi and Chobe Rivers where the borders of Botswana, Namibia, Zambia and Zimbabwe meet. It incorporates a number of notable national parks and nature sites, including Chobe National Park, Hwange National Park, and the Victoria Falls. The region is home to a population of approximately 250,000 animals, including the largest population of African Elephants in the world.

<span class="mw-page-title-main">Shale gas in Canada</span>

The inclusion of unconventional shale gas with conventional gas reserves has caused a sharp increase in estimated recoverable natural gas in Canada. Until the 1990s success of hydraulic fracturing in the Barnett Shales of north Texas, shale gas was classed as "unconventional reserves" and was considered too expensive to recover. There are a number of prospective shale gas deposits in various stages of exploration and exploitation across the country, from British Columbia to Nova Scotia.

Shale gas is an unconventional natural gas produced from shale, a type of sedimentary rock. Shale gas has become an increasingly important source of natural gas in the United States over the past decade, and interest has spread to potential gas shales in Canada, Europe, Asia, and Australia. One analyst expects shale gas to supply as much as half the natural gas production in North America by 2020.

<span class="mw-page-title-main">Fracking in the United Kingdom</span>

Fracking in the United Kingdom started in the late 1970s with fracturing of the conventional oil and gas fields near the North Sea. It was used in about 200 British onshore oil and gas wells from the early 1980s. The technique attracted attention after licences use were awarded for onshore shale gas exploration in 2008. The topic received considerable public debate on environmental grounds, with a 2019 high court ruling ultimately banning the process. The two remaining high-volume fracturing wells were supposed to be plugged and decommissioned in 2022.

<span class="mw-page-title-main">Fracking by country</span> Hydraulic fracturing by country

Fracking has become a contentious environmental and health issue with Tunisia and France banning the practice and a de facto moratorium in place in Quebec (Canada), and some of the states of the US.

<span class="mw-page-title-main">Bwabwata National Park</span> Namibian national park

Bwabwata National Park is a protected area in northeastern Namibia that was established in 2007 and covers 6,274 km2 (2,422 sq mi). It was created by merging Caprivi Game Park and Mahango Game Reserve. It is situated in the Zambezi and Kavango East regions, extending along the Caprivi Strip. It is bounded by the Okavango River to the west and the Kwando River to the east. Angola lies to the north and Botswana to the south.

<span class="mw-page-title-main">Marcellus natural gas trend</span> Natural gas extraction area in the United States

The Marcellus natural gas trend is a large geographic area of prolific shale gas extraction from the Marcellus Shale or Marcellus Formation, of Devonian age, in the eastern United States. The shale play encompasses 104,000 square miles and stretches across Pennsylvania and West Virginia, and into eastern Ohio and western New York. In 2012, it was the largest source of natural gas in the United States, and production was still growing rapidly in 2013. The natural gas is trapped in low-permeability shale, and requires the well completion method of hydraulic fracturing to allow the gas to flow to the well bore. The surge in drilling activity in the Marcellus Shale since 2008 has generated both economic benefits and considerable controversy.

<span class="mw-page-title-main">Fracking in South Africa</span>

Fracking in South Africa is an energy production strategy at early stages of development using high-pressure drilling techniques to release natural gas trapped in shale rock. After initially imposing a moratorium on fracking in April 2011, the South African government lifted the moratorium in September 2012 after an initial investigation by an interdepartmental task team. Several energy companies were subsequently granted exploration licenses. Fracking in South Africa is a current topic of debate, with proponents pointing to substantial economic and energy benefits and opponents voicing concerns about potentially adverse environmental impacts.

Events in the year 2021 in Namibia.

References

  1. 1 2 3 4 5 6 7 8 York, Geoffrey; Graney, Emma (2021-05-30). "As Calgary's ReconAfrica drills for Namibian oil, a global outcry over endangered elephants grows". The Globe and Mail. Retrieved 2022-07-23.
  2. ↑ Barbee, Jeffrey; Neme, Laurel (2021-03-12). "Test drilling for oil in Namibia's Okavango region poses toxic risk". National Geographic. Archived from the original on July 24, 2022. Retrieved 2022-07-23.
  3. ↑ UNESCO (2020-12-21). "UNESCO vigilant on potential impacts of oil exploration in Namibia and Botswana on World Heritage properties". UNESCO World Heritage Centre. Retrieved 2022-07-23.
  4. 1 2 McKenzie, David; Formanek, Ingrid (2021-05-03). "A Canadian oil firm thinks it has struck big. Some fear it could ravage a climate change hotspot". CNN. Retrieved 2022-07-23.
  5. 1 2 Robinson, Matt (2021-05-25). "Vancouver-based firm ReconAfrica touts massive oil find in Kalahari Desert, near world heritage sites". The Vancouver Sun. Retrieved 2022-07-23.
  6. 1 2 3 York, Geoffrey; McGee, Niall (2021-06-21). "'Phenomenal riches': Inside ReconAfrica's aggressive stock promotion campaign". The Globe and Mail. Retrieved 2022-07-23.
  7. ↑ Reconnaissance Energy Africa. "ReconAfrica & NAMCOR Provide Additional Drilling Results and Plans for Next Exploration Phase in the Kavango Basin". Newswire. Retrieved 2022-07-23.
  8. ↑ Prince Harry; Mangundu, Reinhold (2021-10-14). "Protect the Okavango River Basin from corporate drilling". The Washington Post. Retrieved 2022-07-23.
  9. ↑ Haufiku, Rose-Mary (2022-03-30). "Namibia: ReconAfrica Dishes Out Scholarships Worth N$1.2 Million". AllAfrica. Retrieved 2022-07-23.
  10. ↑ Shihepo, Timo (2021-11-01). "US investors sue ReconAfrica over Kavango oil 'scam'". The Namibian. Retrieved 2022-07-23.
  11. ↑ ReconAfrica – No Oil? Pump Stock viceroyresearch.org Retrieved 31 March 2023
  12. ↑ "Oil exploration company in Okavango wilderness misled investors, complaint to SEC says". National Geographic Society . 21 May 2021. Archived from the original on February 21, 2023.
  13. ↑ Shihepo, Timo (2021-10-07). "ReconAfrica accused of destroying Kavango East houses". The Namibian. Retrieved 2022-07-23.
  14. ↑ Neme, Laurel; Barbee, Jeffrey (2021-06-23). "Members of Congress urge investigation into Okavango oil exploration". National Geographic. Archived from the original on June 23, 2021. Retrieved 2022-07-23.
  15. ↑ York, Geoffrey (2 February 2021). "Canadian oil firm's consultant sparks controversy by attacking African environmentalists". The Globe and Mail.
  16. ↑ "136 - Protecting the Okavango from oil and gas exploitation".
  17. ↑ "Oil drilling, possible fracking planned for Okvanago region—elephants' last stronghold". National Geographic Society . 28 October 2020. Archived from the original on February 19, 2021.
  18. ↑ Shihepo, Timo (2022-02-04). "ReconAfrica accused of activities in virgin forest". The Namibian. Retrieved 2022-07-23.
  19. ↑ Anxiety, intimidation accusations swirl over Kavango oil development namibian.com Retrieved 31 March 2023
  20. ↑ "Anxiety And Accusations of Intimidation Swirl Around Okavango Oil Development" . Retrieved 31 March 2023.
  21. ↑ "Namibian court poised to punish local communities for opposing devastating oil and gas drilling in the Okavango River Basin".
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