Virunga Congo’s Oil Saga: A story of shadowy deals, environmental burden and civil society protest

Theodore Trefon noted in 2016 that “Oil has become big business in the DRC and the subject of major deal making – more often than not by dubious partners. It is shrouded in secrecy and controlled by the presidency” (1). The oil and gas sector of the Democratic Republic of Congo (DRC) ranked 84th (among 89 assessments) in the 2017 Resource Governance Index, as a result of “a failing enabling environment and lack of transparency in revenue management”. The DRC has a proven oil reserve of 180.000.000 barrels, although its total oil potential is estimated to be over 5 billion barrels. Oil is currently only produced offshore in the Atlantic Ocean, at a daily rate of about 25.000 barrels.

However, since several years oil companies are exploring potential onshore hydrocarbon reserves in the DRC. Some of these oil deposits are located in environmentally sensitive areas, such as protected national parks. The Congolese government has been (and still is) criticized for granting oil exploration permits in these vulnerable zones, by international and local non-governmental and civil society organisations, as well as by local communities. More in general, it seems that the DRC will continue to invest in the fossil fuels industry, notwithstanding the increased worldwide awareness of climate change.

In February 2021 Congolese civil society and environmental organisations, some of them active in the province of North Kivu, addressed an open letter to president Félix Tshisekedi, requesting the cancellation of all oil exploration and production permits in Virunga National Park, and to abandon the plan, which the previous Minister of Hydrocarbons Rubens Mikindo (UDPS) had announced in January 2021, to launch tenders for 19 new oil blocks (9 in the Central Congo basin, 3 in the coastal Congo basin, 4 in Lake Tanganyika and 3 in Lake Kivu).

The authors of the open letter point out that oil exploitation in Virunga would endanger the rich and unique eco-systems, and negatively affect health and livelihood of local communities. They argue that by granting oil licences the DRC would make a non-sustainable choice at the very moment that global awareness of the importance of renewable energy transition is growing.

Virunga is a UNESCO World Heritage Site located in North Kivu that stretches along the border with Uganda and Rwanda, comprising the northern Rwenzori Mountains, the centrally located Lake Edward (that straddles the border with Uganda) and southern tropical forests and volcanoes (where the endangered mountain gorilla lives). School children and teachers in Bukavu, South Kivu, protested in support of the civil society’s demand for the cancellation of oil permits in Virunga National Park, at the occasion of Global Climate Strike on March 19, 2021.

Already in September 2018, Alliance pour les Moyens d’Existence Verts, a consortium of civil society organisations from North Kivu, submitted a petition against any future oil production projects in the national parks of Virunga and Salonga (the latter another UNESCO World Heritage Site in the heart of the Congo Basin, harbouring an important bonobo population), which was signed by about 23.000 members of local communities in North Kivu.

The immediate cause of the 2018 protest was the intention of the Kabila-government to declassify parts of the Virunga and Salonga Parks by redrawing boundaries, in order to open up these protected areas to oil exploration. Early 2019 and end 2020, fishermen of Lake Edward, united in the association Fédération des Comités des Pêcheurs Individuels du Lac Edouard (FECOPEILE), asked newly elected president Félix Tshisekedi, to prohibit oil extraction in Virunga National Park in general, and in Lake Edward in particular, and to safeguard local communities.

In the past two decades the Congolese government signed controversial agreements with several international oil companies. In 2007 it granted UK-based SOCO International a concession on oil Block V that overlaps a part of Virunga National Park (including Lake Edward). The company started to conduct seismic surveys in Virunga in 2014. According to Global Witness, SOCO’s oil exploration activities in Virunga were accompanied by corrupt practices and harassment of local activists and communities. Eventually, under local and international pressure SOCO decided to stop its oil activities in Virunga.

The French company Total together with South African SacOil also obtained a concession (oil Block III) in an area that partly lies within Virunga Park. Total declared already in 2013 that it would not start oil drilling in the national park. The fact that Total committed to withdraw from Virunga, did not deter the company to explore other controversial opportunities: it started operating the Tilenga project for development of oil resources in Uganda’s Lake Albert region, a project that might impact negatively Murchison Falls National Park and local farmer communities, and that is opposed by French and Ugandan non-governmental organisations. Oil produced by Total will be transported to the Tanzanian port of Tanga by a new cross-border pipeline that will be constructed by East African Crude Oil Pipeline (EACOP). (See IPIS Briefing October 2020.)

Early 2018 the Compagnie Minière Congolaise SPRL (CoMICo), a firm owned by the shadowy UK-registered Central Oil and Gas Ltd. (40%), obtained presidential approval for a Production Sharing Agreement (PSA). The agreement allowed CoMiCo to start exploration of three oil blocks in the Central Congo Basin (Cuvette Centrale), one of them overlapping parts of Salonga National Park: Global Witness revealed that this deal was legally questionable.

In the final weeks of Kabila’s presidency, another controversial deal was closed: a PSA that was already signed in 2007 between the South African company DIG (Divine Inspiration Group) Oil and the Congolese state, for three oil blocks in the Central Congo Basin including a field that coincides spatially with Salonga National Park, received presidential approval in December 2018.

Not surprisingly, also the Israeli businessman Dan Gertler has been showing up in the oil chapter of Congo’s ongoing natural resources saga. Gertler, a close friend of former president Joseph Kabila, built a fortune by closing highly questionable mining and oil deals in the DRC (2). It is telling that the Biden-administration recently reimposed sanctions on Gertler for corruption in DRC’s mining sector. The controversial billionaire was involved in two geopolitically sensitive oil deals: one concerns offshore oil blocks in a zone of the Atlantic Ocean that has been the subject of border issues between the DRC and Angola; the other is about oil blocks in the region of Lake Albert, which is located on the border between the DRC and Uganda.

Nessergy, a company owned by Dan Gertler’s holding company Fleurette Group, signed in 2006 an agreement with the Congolese government, granting it rights to offshore oil blocks for about 500.000$. Nessergy’s oil rights were sold back in 2012 to the Congolese and Angolese governments for a hundred of times higher price, a transaction that according to Global Witness, lacked transparency. DRC and Angola had started negotiations to establish a so-called economic Common Interest Zone, to settle issues over disputed oil-rich maritime territory: Global Witness stated that the oil rights of Nessergy accounted for half of the Common Interest Zone. The agreement on the Common Interest Zone remained dead letter for a long time, but early 2020, president Tshisekedi and his Angolese colleague Joao Lourenço restarted negotiations about joint oil exploration in this common area.

Trefon (Congo’s Environmental Paradox, p. 109-110) notes that exploration licences regarding oil blocks I and II on the Congolese side of Lake Albert have been granted over the years to different consortia. In 2006 the oil blocks were granted to UK-based Tullow Oil, a company also active at the Ugandan side of Lake Albert (besides Tullow, also Total and the China National Offshore Oil Corporation are exploring at the Ugandan side of the lake); in 2008 a deal was signed with DIG Oil; and in 2010 the Congolese government signed a contract about these blocks with Caprikat and FoxWhelp, two obscure companies which are registered in the Virgin Islands and are linked to Dan Gertler.

Trefon explains the rescission of the contract with Tullow from a geo-strategic point of view, arguing that ‘it was a deliberate strategic move to undermine Ugandan capacity to move forward with prospecting and ultimate drilling’ (the relationship between the DRC and Uganda has gone sour as the result of border disputes such as in the region of Lake Albert). Dubious oil agreements that were signed by Kabila’s administration, have left an unpleasant legacy for the Tshisekedi government. In November 2018 the International Chambre of Commerce in Paris ordered the Congolese government to pay $617m to South African DIG Oil (3).

The company blamed the Congolese state that it took more than 10 years to get presidential approval for contracts for oil blocks in the Cuvette Centrale, preventing the company to start exploration, and that block I in Lake Albert, for which DIG Oil previously signed a contract with the Congolese government, was afterwards awarded to Caprikat and Foxwhelp. According to information obtained by Africa Intelligence (15/03/2021), some members of the inner circle of president Tshisekedi, including the new Minister of Finance Nicolas Kazadi (UDPS), prefer a negotiating strategy, instead of continuing the legal battle. Kazadi seems to be involved in negotiating a ‘deal’ with DIG Oil, which would reduce the compensation from $617m to $300m, in exchange for new oil exploring permits. Africa Intelligence recently revealed in its issue of 13/04/2021, that Kazadi has familial ties with Nozi Mwamba, founder and shareholder of DIG Oil.

Though some of his (ex-)ministers seem to be involved in potentially dubious oil deals, or have been promoting oil exploration in environmentally sensitive area, president Tshisekedi confirmed at the Leaders’ Summit on Climate 2021, 22-23 April, the DRC’s commitment to contribute to the global fight against climate change, in the context of sustainable development and poverty reduction.

The new minister of Hydrocarbons, Didier Budimbu, has the difficult task to improve governance, transparency and profitability of the Congolese oil sector. The question remains if he will be able (or willing) to outline a hydrocarbon policy, that takes into account concerns about global warming in general, and endangered Congolese eco-systems in particular.

Erik Gobbers

(1) Trefon, T. (2016). Congo’s Environmental Paradox: Potential and Predation in a Land of Plenty. London: Zed Books.

(2) The State vs the people: Governance, mining and the transitional regime in the Democratic Republic of Congo. Amsterdam: Fatal Transactions.

(3) Judgment of the Paris Court of Appeal (DIGOIL v. DRC), 7 November 2018.

FURTHER READING

Threat to Africa’s parks | April 2021 | Le Monde diplomatique

Powerful oil companies have set their sights on the huge potential reserves under Sub-Saharan Africa’s wildlife sanctuaries, which will be far cheaper to exploit than deep offshore deposits. Resistance from civil society and NGOs can do little to stop them.

Rooting for our forests | 9 October 2020 | Transparency International

We take forests for granted. We forget they’re the reason we breathe, until they burn. We don’t know of all the ways they keep us safe, until we’re sick. We ignore how our way of life threatens them, until they’re gone.

Oil rights in Salonga National Park could be null and void, Global Witness analysis reveals | 1 February 2019 | Global Witness

Global Witness reveals today that an opaque Guernsey-owned company’s oil rights threatening a protected national park in Democratic Republic of Congo (DRC) could be null and void, according to our legal analysis.

Congo Basin forest loss dominated by increasing smallholder clearing | 7 November 2018 | Science Advances

A regional assessment of forest disturbance dynamics from 2000 to 2014 was performed for the Congo Basin countries using time-series satellite data. Area of forest loss was estimated and disaggregated by predisturbance forest type and direct disturbance driver. An estimated 84% of forest disturbance area in the region is due to small-scale, nonmechanized forest clearing for agriculture. Annual rates of small-scale clearing for agriculture in primary forests and woodlands doubled between 2000 and 2014, mirroring increasing population growth. Smallholder clearing in the Democratic Republic of the Congo alone accounted for nearly two-thirds of total forest loss in the basin.

Congo to Destroy UNESCO World Heritage Sites in search for Oil | 11 October 2018 | African Exponent

Congo’s Virunga National Park, the oldest national park in Africa and the Salonga National Park, home to endangered Gorillas have been handed over by Congo’s President to a UK oil company, Soco, to be destroyed for oil exploration.

DR Congo explores oil drilling allowed in wildlife parks | 30 June 2018 | BBC

The Democratic Republic of Congo government is looking into whether to allow oil exploration in two protected wildlife parks, Virunga and Salonga. The move is strongly opposed by environmental activists, who say drilling would place wildlife at risk and contribute to global warming.

Oil Extraction Imperils Africa’s Great Lake | 4 November 2016 | Royal Belgian Institute of Natural Sciences

An international group of scientists sound the alarm in Science about the plans to extract oil and gas from the African Great Lakes. 70 researchers from 17 countries, including 10 Belgians, express their concerns about possible oil and gas extraction in the Great Lakes region in East Africa.

Source: IPIS

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