Congo halts Oil and Gas auction over corruption allegations

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Tajul Islam
  • Update Time : Saturday, October 26, 2024
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The Democratic Republic of Congo (DRC) has cancelled a significant auction of oil and gas exploration rights, following a series of revelations that have raised serious concerns about backroom deals and environmental risks. This decision comes after investigative reporting exposed potential preferential treatment and irregularities in the auction process, which was set to open up large sections of the country’s highly sensitive ecosystems, including parts of the Congo Basin, for drilling.

The Congo Basin, often referred to as the “lungs of Africa,” is the last rainforest in the world that stores more carbon than it emits. This unique carbon sink plays a crucial role in regulating the Earth’s climate, making it a key element in the global fight against climate change. The possibility of drilling in this ecologically vital region had sparked outrage among environmental groups and activists, particularly given the potential release of vast amounts of carbon if the rainforest’s delicate peatlands were disturbed.

On October 11, Aimé Sakombi Molendo, the DRC’s minister of hydrocarbons, announced that the government had found numerous irregularities in the auction process. According to Sakombi, an internal evaluation revealed a “lack of applications, inadmissible bids, late submissions, and inappropriate or irregular bids,” rendering the auction untenable. His statement effectively confirmed the concerns raised by investigative journalists and environmental organizations.

At least 13 of the blocks slated for auction overlapped with protected areas, with two encroaching on tropical peatlands that are the world’s largest. Any disturbance in these areas could have catastrophic consequences for global climate stability, as they could release vast amounts of carbon into the atmosphere, accelerating global warming.

One of the most concerning elements of the auction involved Alfajiri Energy, a little-known Canadian company that, despite lacking the necessary expertise, won the rights to extract gas from one of the blocks. The Bureau of Investigative Journalism (TBIJ) revealed that Alfajiri had benefited from apparent preferential treatment, raising red flags about the transparency of the auction process. Sources with direct knowledge of the auction told TBIJ that Didier Budimbu, the then-minister of hydrocarbons, had pressured officials to rig the auction in favor of Alfajiri Energy.

While Budimbu, who has since been reassigned as the DRC’s minister for sport, has denied any wrongdoing, the allegations have cast a long shadow over the integrity of the auction. He claimed that accusations of his involvement were based on partial information and could be politically motivated. Alfajiri Energy’s chief executive, Christian Hamuli, also rejected the allegations, insisting that the company did not benefit from any inappropriate meddling.

The revelations surrounding the auction ignited a firestorm of criticism from environmental groups, particularly Greenpeace Africa, which has demanded a thorough investigation into what it called a “damning affair.” Activists have voiced concerns not only about the lack of transparency in the auction process but also about the potential environmental consequences of allowing inexperienced or underqualified companies to operate in such sensitive areas.

Jimmy Munguriek, a representative from the Congo Is Not For Sale (CNPAV) campaign, voiced frustration over the lack of accountability in the selection of companies involved in the auction. “There is no transparency about how the companies are chosen. We have to stop selecting companies that don’t have the skills,” he told the Congolese news outlet Actualité.cd.

A month after the TBIJ report was published, the French-British oil company Perenco, the last major player involved in the auction, withdrew from the process. Perenco’s departure further undermined the credibility of the auction, leaving the DRC government with few credible bidders.

Despite the cancellation of this round of the auction, the environmental threat has not been completely averted. Minister Sakombi indicated that the government would relaunch the auction process in the future, potentially with some adjustments. These changes could include redrawing the borders of the auctioned blocks to avoid overlapping with protected areas, but it remains unclear whether this will address the concerns raised by environmental advocates.

The DRC government faces a difficult balancing act. On one hand, the country is rich in natural resources that could bring significant revenue to one of the world’s poorest nations. On the other hand, tapping into these resources could have devastating environmental consequences, not just for the Congo Basin but for the entire planet.

The outcome of this auction, and any future iterations, will have far-reaching implications for the global fight against climate change. The Congo Basin’s role as a carbon sink is invaluable, and its protection is a critical component in the effort to curb global temperature rise. Environmental organizations are calling on the DRC government to prioritize sustainability and transparency in any future dealings concerning oil and gas exploration.

As the international community becomes increasingly aware of the links between resource exploitation and environmental degradation, the DRC’s handling of these auctions will be closely scrutinized. For now, the cancellation of the auction is seen as a victory for transparency and environmental protection, but the question remains whether future actions will genuinely reflect these values.

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Avatar photo Tajul Islam is a Special Correspondent of Blitz.

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