Namibia: Recon Already Gained From Licence

(File photo).
27 October 2021

Canadian oil explorer ReconAfrica has already benefited financially through the Canadian Stock Exchange from the licence they obtained from the Namibian government for exploration in the two Kavango regions. Namibia, through the National Petroleum Corporation of Namibia (Namcor), owns 10% of the licence while ReconAfrica owns 90%.

The chairperson of the Parliamentary Standing Committee on Natural Resources Tjekero Tweya wanted to know during a public hearing with

Namcor representatives yesterday what benefits government has accrued to this end from the joint venture. "Our interest is how best we can harness our resources for the benefit of the country and its people.

ReconAfrica is already benefiting at exploration level and not production while Namibia is getting zero," he said. Namcor board chairperson Jennifer

Comalie indicated to the committee that since ReconAfrica acquired the licence in 2015, their market value on the Canadian stock exchange has increased significantly from US$0.06 as of 29 January 2015 to US$10.94 as of 27 July 2021 in close share price.

"We monitor ReconAfrica performance to know what the incremental values are in the shares when activities take place," explained Comalie. Committee member and Rally for Democracy and Progress (RDP) parliamentarian Mike Kavekotora said ReconAfrica has created value through the Namibian resource and should be questioned how local companies are not given a chance to take advantage of local resources.

To date, about 40 licences have been issued by the mines and energy ministry.

Comalie noted when the mother company Recon Energy applied for the licence to have operations in Namibia, they made a proposal to the mines and energy ministry.

She said Namcor had no power to object to the 10% as it was already approved by the ministry. The hearing was called in regard to the petition submitted to parliament on 24 February 2021 by Save the Unique Lifestyle of the Okavango (SOUL), a group of Namibian, Southern Africa and international civil society organisations, scientists and activists, opposed to the oil and gas exploration activities of ReconAfrica in the two Kavango regions. The company has been accused of an array of shortcomings and failures since it started operations earlier this year.

The committee also met with environment ministry officials yesterday where they laid concerns including the lack of information accessibility to the local community.

Tweya claimed traditional authorities were not consulted by the ministry but rather meetings were held with community members, which is wrong.

The committee further alluded the ministry relied heavily on information provided by ReconAfrica that has a feasible interest on the project. Executive director Teofilus Nghitila assured the committee the ministry would further undertake strategic environmental assessment to assess the long-term impact of the project. "ReconAfrica drilling is not within conservancies, or corridors for wildlife threat. Also, there is no fracking expected to take place," he stated.


Earlier this month, ReconAfrica said it remains committed to being guided by and is in compliance with Namibia's Environmental Management Plan, Environmental Clearance Certificate and all laws regulating petroleum activities in the country.

"Our operations continue to be guided by our Environmental Management Plan (EMP), a compass to environmental compliance. We further continue to ensure the 2D seismic data acquisition is undertaken in a manner to enhance our knowledge of the Kavango sedimentary basin, while uplifting the socio-economic context of our immediate communities in the Kavango East and Kavango West regions," the company said in a statement.

During an earlier hearing, petroleum commissioner in the mines and energy ministry Maggy Shino said the key public concern, also highlighted in the petition, was whether the drilling project involves fracking.

She again clarified that ReconAfrica's petroleum exploration licence was awarded only for conventional oil and gas exploration, and not for fracking. "Fracking is a more expensive and complicated process to produce oil or natural gas from non-reservoir rocks. The licence holder uses environmentally friendly technology to preserve environmental and water resources. Also, the oil drilling operations are located far from the environmentally sensitive zones, and there is no land grabbing," she stated. Furthermore, Shino said Namibia would benefit from the oil exploration through government revenue, which is expected from royalties at a rate of 5%, and petroleum income tax of 35%. Also, through rental fees, the country is set to receive N$12.2 million.

ReconAfrica has thus far spent US$40 million, of which US$14.03 million (almost N$210 million) has been spent locally.

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