Project – ActiveThis profile is actively maintained
BankTrack, 350.org Africa, Greenpeace Africa & Rainforest Foundation UK
Why this profile?
The Congolese government has launched calls for tenders on 30 oil and gas blocks located in the Congo Basin. This region hosts protected areas and peatlands, and fossil fuel extraction in the area risks leading to environmental destruction, displacement of local people and loss of traditional livelihoods. In addition, fossil fuel exploitation in peatlands causes a vicious cycle, simultaneously removing one of the world’s most important carbon sinks while drastically increasing emissions.
What must happen
Financial institutions should avoid supporting companies involved in bidding for or developing these oil and gas blocks, either through direct project financing or general corporate finance. Financial institutions should also ensure they have policies in place restricting finance to any company that participates in oil and gas auctions, especially in protected areas.
|Sectors||Oil and Gas Extraction|
In January 2021, former Minister of Hydrocarbons Rubens Mikindo announced his intention to open 19 new oil blocks to bidding from fossil fuel companies. In April 2022, the new minister Didier Budimbu Ntubuanga proposed 16 oil blocks to the council of ministers for approval. However, three months later, the DRC began accepting bids for exploration in 30 oil and gas blocks, introducing 14 additional blocks that were not put before the council of ministers. The blocks are spread across the country throughout three sedimentary basins, including the coast, central Congo, and the Tanganyika rift valley. Minister Ntubuanga promised that all protected areas will be spared, but according to an analysis by Greenpeace, 13 blocks lie in protected areas.
Impact on human rights and communities
Land grabbing & local opposition
Much of the forest land throughout the DRC is inhabited by local communities, which have customary rights to the land. Congolese law states that these people must at the least be consulted, and Indigenous communities have the right to Free, Prior and Informed Consent to developments affecting their lands. The exploitation of oil – given the large intersection between the oil blocks and these people’s land – is a serious threat to the communities.
Greenpeace conducted four field trips to six designated oil blocks, interviewing members of the local community near the land put up for auction. Neither the government nor extractive companies have consulted these communities – despite trading leases to their land. Greenpeace has reported on the opposition expressed by the communities to the project and their anger at being excluded from the discussion.
With regard to the gas blocks, while gas extraction has not yet begun in the DRC side of Lake Kivu, it has in Rwanda. Communities living by power plants on the Rwandan side of Lake Kivu reported few changes in their economic prospects or access to energy. The population near the lake have already expressed concerns regarding the environmental impacts of methane gas extraction, such as groundwater and surface water contamination as well as the destruction of aquatic life.
Health and Livelihoods
Populations across the oil and gas blocks largely rely on fishing, subsistence agriculture and livestock. Fossil fuel extraction represents a threat to these livelihoods, with the potential to poison the rivers and land upon which the communities depend.
While no activities have started yet in the new oil blocks, the DRC is able to draw lessons from its experience with the oil giant Perenco. Two French NGOs took Perenco, which currently operates 11 other fields across the country, to court, suing the company over more than 150 separate instances of serious pollution, including methane releases, oil leaks, and the burying of toxic sludge. The University of Lubumbashi’s toxicology department released a 2020 study in which researchers tracked alarming rates of respiratory and digestive illnesses, as well as benzene contamination, in communities near drill sites.
Broader research suggests that contaminated crops are stunted and the food they produce is depleted, lacking nutrients. Pollutants from crude oil can cause heart disease, mental disorders, severe allergies, and respiratory issues, particularly among the young and old. Dust particles from drilling, too, may cause illness among local communities.
Despite Congo’s legal framework governing the disposal of waste, the lack of practical oversight has allowed Perenco to pollute at will. Many of the new oil blocks slated for development are in far more remote, logistically challenging and ecologically sensitive areas than Perenco’s fields. It’s likely that future fossil fuel exploitation will lead to serious health impacts on the local population – especially given that the government and fossil fuel companies already circumvented the law during the auction award process.
Impact on climate
Any new fossil fuel project is out of line with the International Energy Agency’s roadmap for keeping global temperature rises under 1.5° Celsius. Under its Nationally Determined Contribution (NDC) for mitigating climate change, the DRC committed to reducing greenhouse gas emissions by almost 20 percent over the next decade. Yet the blocks put up for auction could contain as much as 16 billion barrels of oil. Given that one barrel of oil is equivalent to 0.43 tonnes of CO2 emissions, the Congolese oil reserves have the potential to release almost 7 billion tonnes of CO2 into the atmosphere.
Fossil fuel exploitation in peatlands causes a vicious cycle, simultaneously removing one of the world’s most important carbon sinks while drastically increasing emissions. DR Congo’s peatlands store about 30 gigatons of carbon, equivalent to three years of global carbon pollution. Research suggests these areas are vulnerable to climate change and may emit carbon as increased heat causes them to dry out. The development of roads and pipelines, as well as exploratory drilling, only adds to this problem by potentially changing the peatlands’ drainage system. This, too, could cause peatlands to dry out and release their carbon stores.
Impact on nature and environment
Mismanagement of these projects – as has occurred at active Perenco sites – could cause oil spillage and improper waste disposal, spewing contaminated water into the environment. An oil spill reaching the rivers would threaten not only the biodiversity in these specific blocks, but also plants and animals in the protected areas that lie nearby. Oil pollution affects nutrient cycles in soil microbes, removing nitrogen from the soil and destabilizing the ecosystem. Oil spills also destroy soil biodiversity, stunt the growth of fish, and poison waterfowl.
Moreover, these extractions will take place in the world’s second-largest forest basin, and in a massive peatland. Fossil fuel exploration disturbs peatlands, as contaminants spread quickly and easily – dragged along by flowing water – and persist for years.
Gas exploitation at Lake Kivu runs the risk of gas eruptions, harmful algae blooms, and contamination of the water supply with “washing water” - the water used to clean raw gas at the power plant that contains hydrogen sulfide, which is toxic to fish and other animals.
The government’s legal authority to authorize the sale of these oil and gas blocks appears uncertain. Nearly half of the blocks were put up for auction without the appropriate legal procedure, which requires consulting the council of ministers. When pressed, the minister said it was “inadvertent” that blocks were put up for bidding without an official confirmation. Minister Ntubuanga also lied during his interview on TV5Monde, saying that none of the blocks lie in protected areas. In fact, 13 protected areas overlap with these blocks, including Virunga National Park, a UNECO World Heritage site.
The DRC suffers from high rates of corruption, raising concerns about this project. To drill for oil in the DRC, companies must pass through the Congolese Ministry of Hydrocarbons, a process which, some researchers claim, requires paying millions of dollars to arrange meetings and acquire important data.
While Minister Budimbu has claimed otherwise, the auction process has been far from transparent so far. Two oil blocks were reportedly reserved for the firm Clayhall Group, an online betting tycoon, in exchange for the pre-financing of geological surveys. In a letter addressed to the Minister last year, Clayhall’s CEO Chukwuma Ojuroye stressed the “necessity and urgency” of proceeding with a separate, restricted tender to concretize the deal. The Minister failed to mention this deal in any of his numerous press conferences, media interviews or tweets and only updated the Council of Ministers on the pre-financing agreement, without mentioning the clause reserving oil blocks for Clayhall.
Moreover, at least two of the companies involved in the Lake Kivu exploitation, Aljafiri Energy and Winds Exploration and Production LLC, have no infrastructure in place and no experience in gas extraction in Congo or elsewhere in Africa. Alfajiri Energy was just founded in January 2022 and Wind Exploration and Production currently only operates one gas field in Utah, United States. Symbion Energy, which tried to start a gas extraction project on the Rwandan side of Lake Kivu, failed to raise enough funds and sold its lease to a new company, which has not yet been able to build a power plant.
To date there is no information available on the financial institutions that will support the development of these oil and gas blocks.
Three North American companies won their bids to exploit natural gas in Congo’s Lake Kivu. Two companies are American - Symbion Power (acting through a local subsidiary called RED), and Winds Exploration and Production LLC - while the other, Alfajiri Energy, is based in Canada. Winds Exploration claims to be partnered with BP; the other two have no public affiliations. The auction for the oil blocks has not yet been completed.
2023-01-16 00:00:00 | Gas blocks awarded to three North-American companies
In January 2023, the DRC awarded licenses to three North America-based companies to begin drilling in the natural gas blocks. The ministry will begin unveiling its chosen companies for the oil blocks in April, and will continue to release the names until October. The minister hopes to kick off production in 2024.