Canadian company ReconAfrica has raised N$133 million to look for oil in Namibia.
This comes a week after civil society organisations pleaded with international investors to stop pumping money into the exploration company.
ReconAfrica tried to raise N$110 million (US$6,5 million) on 27 June through the Toronto Stock Exchange to explore 12 oil wells in the Kavango East and West regions.
ReconAfrica's founder is Craig Steinke who is also a shareholder in the company.
The company says it ended up raising N$133 million (US$7,4 million).
ReconAfrica's management is facing investor pressure due to its substantial spending of over N$445 million on three test wells which have failed to yield commercial oil since 2021.
The company has obtained an environmental clearance certificate (ECC) from the Ministry of Environment, Forestry and Tourism, granting it permission to drill 12 additional exploration wells from 4 July this year to 4 July 2026.
ReconAfrica has remained tight-lipped on its alleged financial challenges and issues involving foreign staff.
Although the company acknowledges changes in operations, it has declined to directly address apparent lay-offs and financial issues.
With mounting debt, and about N$986 million (in 2022) left in cash from investors, there were doubts whether ReconAfrica's management would be able to afford its activities.
Company spokesperson Ndapewoshali Shapwanale last month said during the data interpretation process, on-the-ground activities will slow down, and will recommence when the company begins its next drilling campaign.
"As with any other oil and gas project, the programme reaches the stage where the focus shifts from acquisition of data to the integration and interpretation of it, with the goal of determining where best to direct the next phases of the exploration project," she said.
ReconAfrica employs about eight foreigners for its drilling activities, and about 200 local people - a claim rejected by a parliamentary committee.
COALITION AGAINST RECON
A coalition of civil society organisations from Namibia, Canada and the United States (US) are calling on the Toronto Stock Exchange Venture to reject regulatory approval to ReconAfrica for new share listing.
The group says the shortcomings in drilling operations have been well recognised.
Lorne Stockman, research co-director with Oil Change International, says: "ReconAfrica is seeking capital for a drilling programme that simply should not be happening. It threatens one of the world's richest ecosystems, and flies in the face of climate science."
Rob Parker, of the Economic and Social Justice Trust of Namibia, says ReconAfrica has promised Namibia development and shareholders riches.
"The company . . . has found nothing and cannot drill, according to their own statement without a joint venture partner. We don't think there is any reason for any more shareholders to be deceived," he says.
Environmental organisation Frack Free Namibia this week said ReconAfrica made community development and employment promises in the two Kavango regions, but no meaningful benefits have trickled down to the communities since 2019 when they launched operations.
MINISTRY RESPONDS
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Clarifying the issuance of the ECC to ReconAfrica, environmental commissioner Timoteus Mufeti said the issuance of the ECC was done in accordance with the law.
He says the environmental commissioner's office must ensure that identified and listed economic activities are cleared for possible environmental impacts.
"On this basis, to date, Namibia has managed its environmental matters very well and the trend will continue into the future," Mufeti says.
"Consultation activities were undertaken in January and February, focusing on the interested and affected parties and local communities, including land- owners and traditional authorities," he says.
"The Office of the Environmental Commissioner . . . is convinced that the potential negative impacts to the local individual drilling sites . . . will be low, manageable and can be mitigated," Mufeti says.
