The Democratic Republic of Congo has cancelled 27 oil exploration blocks

For the time being, anyway.

The Democratic Republic of Congo has cancelled its auction of 27 oil exploration blocks. The auction for licensing rights for the blocks was launched in July 2022. The cancellation was announced by the Ministry of Hydrocarbons in a statement dated 11 October 2024.

The statement refers to an ad hoc commission established by the Ministry of Hydrocarbons in July 2023 to evaluate the bids received. The ad hoc commission’s reports revealed “a lack of application, inadmissible bids, late submissions, inappropriate or irregular offers, and a lack of competition”.

“In view of the above,” Aimé Sakombi Molendo, DRC’s Minister of Hydrocarbons, states, “I am obliged to declare the cancellation of the ongoing process”.

However, he added that he would “relaunch the same procedure” without giving any further details such as the number of blocks that would be auctioned, or a timeline for doing so.

DRC’s “carbon bomb”

According to AP, the 27 oil blocks in the cancelled auction hold an estimated 22 billion barrels of oil. Bloomberg puts the figure at 16 billion barrels.

Several of the blocks up for auction overlapped protected areas in the Cuvette Centrale, the largest area of peatlands in the tropics, Nine of the blocks overlapped rainforests, including the Virunga National Park.

When the auction was announced in July 2022, Greenpeace Africa’s Irene Wabiwa Betoko commented that,

“The invitation to big oil companies to trash Congo’s most sensitive ecosystems and drill into the carbon bomb of peatlands is a historic error that must be scrapped immediately.”

A “significant victory”

Greenpeace Africa welcomes the decision to halt the bidding process for the 27 oil blocks, and calls on the government to fully stop this process.

In a press statement, Bonaventure Bondo, Forest Campaigner for the Congo Basin at Greenpeace Africa, says,

“This decision marks a significant victory, albeit temporary, stemming from the courageous advocacy efforts spearheaded by Greenpeace Africa since 2022 against this initiative. We call on the Congolese government to focus on investing in and promoting renewable energy sources instead of initiating a new bidding process for oil blocks, which would only recreate the same climate of uncertainty that has plagued the country for the past two years.”

Rainforest Foundation UK, Rainforest Rescue, Greenpeace Africa, 350.org, and other African civil society groups launched a petition against the development of new oil fields. More than 117,250 people have signed the petition. “As the threat has not been completely averted, we continue to collect signatues,” Rainforest Rescue states.

Marianne Klute, Co-Chair of Rainforest Rescue, comments that,

“The government has done the right thing and canceled this unspeakable auction. But the fact that it may be making a new attempt to extract oil in the Congo Basin, even if it excludes protected areas, is worrying. Oil and gas extraction endangers nature, the climate and local people and must be stopped once and for all. President Félix Tshisekedi calls the DRC a ‘country of solutions’ when it comes to climate and rainforest protection, and he must live up to his claim.”

Few companies interested

According to the oil and gas industry Upstream news website, at least five companies showed interest in the oil blocks that were up for auction. However, no blocks were awarded.

Greenpeace points out that in a technical note submitted to the Council of Ministers on 11 October 2024, the Ministry of Hydrocarbons announced the cancellation of the auction of 27 oil blocks and three gas blocks. But the communiqué published on the Ministry’s website only refers to the 27 oil blocks.

In September 2023, the Environmental Investigation Agency and Rainforest Foundation UK announced that the first two contracts had been awarded to a US company called Winds Exploration and Production and a Canadian company called Alfajiri Energy.

In July 2023, Winds Exploration and Production had its certificate of organisation revoked by the state of Texas for alleged tax breaches. That means the company is legally inactive and barred from carrying out business there. “It is unclear,” EIA writes, “how the DRC contract could be awarded to a company with such status.”

Alfajiri Energy was incorporated in January 2022, not long after DRC announced its planned auction of oil and gas blocks. The Bureau of Investigative Journalism reported in November 2023 that,

[A]n investigation by the Bureau of Investigative Journalism and Reuters can reveal that DRC’s oil and gas block auction has been plagued with apparent preferential treatment and backroom deals. And major questions have been raised about the company tasked with extracting gas from Lake Kivu’s depths.

Reuters and the Bureau of Investigative Journalism saw a December 2022 report on Alfajiri Energy, produced by DRC’s Ministry of Hydrocarbons. The report detailed how Alfajiri Energy’s bid lacked important information, including a work plan or a feasibility study.

Nevertheless, the Ministry of Hydrocarbon produced a second report that deleted key concerns about the company. The Bureau for Investigative Journalism reports that two sources with first-hand knowledge of the auction said that then-Minister of Hydrocarbons Didier Budimbu pressured ministry experts to change the report.

Two weeks before Alfajiri Energy was announced as a qualifying bidder, Budimbu travelled to Calgary, where he met Christian Hamuli, Alfajiri Energy’s CEO.

Alfajiri Energy had no financial statements. It had no business address. The company was registered at Hamuli’s home address.

Didier Budimbu

Didier Budimbu won his first ministerial appointment in 2019. Five years previously, he was in jail in Belgium. He was sentenced to two-and-a-half years for fraud and money laundering. He was part of a group who defrauded a married couple of €2 million by blackmailing them with nude photographs.

In August 2022, Budimbu told the Financial Times that DRC would allow carbon credit and cryptocurrency companies to bid for the oil and gas explorations blocks, as long as they had solid financial backing.

This was in response to a completely bizarre initiative from RedemptionDAO which aimed to buy rainforest in DRC to “co-create nature-based revenue streams”. RedemptionDAO had the backing of Flowcarbon, which in itself should have been an enormous red flag.

RedemptionDAO aimed to raise US$50 million. In fact, it raised the equivalent of only US$74,000 in a stablecoin called USDC.

In July 2023, the French-British oil company Perenco gave four Toyota Land Cruisers to the Ministry of Hydrocarbons. Greenpeace described this as a “curious gift”. Perenco claimed the donation was agreed before the auction and was to help the fight against oil smuggling. Perenco was sued in France over pollution associated with the company’s oil operations in DRC.

Perenco pulled out of the deal one month after the Bureau of Investigative Journalism’s report was published.

One possible explanation for this mayhem was that the government was hoping the licensing round would provide cash before the election in December 2023. On signing a contract with the government, bidders pay “upfront fees” ranging from US$200,000 for remote blocks with little information, to US$5 million for blocks with confirmed oil and gas reserves.

The government asked Alfajiri Energy for US$3.9 million. Alfajiri Energy’s counter offer was US$20,000.

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