Are fossil fuel companies scamming investors?

Recently, reports emerged regarding an offshore oil discovery in Namibia, this time by global oil giant, Royal Dutch Shell. Decade-long searches for oil and gas by several global energy firms have always drawn blanks, something that has been pleasing to many environmentalists who are sure that an oil discovery in the south-western African nation would mean disaster for the environment.

The latest discovery, the extent of which even Shell itself admits is not (yet) available, has brought excitement to expectant global fossil energy investors.

However, some unscrupulous players in the global energy industry have recently appeared to turn Namibia into a resource of its own, capitalising on the never-materialising promise of a major Namibian oil find to boost confidence in their stocks by putting positive spins on disappointing drilling results, thereby selling bottled smoke to global investors desperate for huge rewards. 

One such alleged case is that of a Canadian oil exploration firm named Reconnaissance Energy Africa Limited (ReconAfrica), which claimed to have hit the jackpot in the Okavango basin on the Namibia-Botswana border - "good news" that saw the company's value shooting from $191 million to over $1 billion in less than six months. This "stock scam" is now the subject of a court case in the United States after investors who got their fingers burnt filed a class action against ReconAfrica in October last year.

FairPlanet interviewed Namibian environmental activist Ina Maria Shikongo from the Fridays for Future movement in Windhoek, for her views on the latest ‘Eureka!’ scream by Shell, which even Namibian government officials are hesitant to comment on with any degree of certainty.

FairPlanet: As an environmentalist, what is your reaction to the recent reports of an offshore oil discovery in Namibia?

Ina Maria Shikongo: I personally think that it’s one of those many frauds that companies here have been getting away with.

What do you mean by “frauds”?

Projecting positive oil finds without having the true data on hand. [And also] concealing harms and effects.

Why do you think this could be the case?

It is not the first time that drilling has taken place in that region. Back then there was no oil and now, today, all of a sudden things have changed when they can make more millions in making false claims through the stock exchange without having to need the oil.

You mean like the ReconAfrica saga that is now playing out in the courts in the US? Previous reports show that these firms seem to be struggling to find oil, so could there be possibility of 'sources' planting these reports in the media to boost the investors’ interest?

Yes, that’s what I think. ReconAfrica has been a perfect example of what the possibilities are in Namibia and stock scam is another option for improving one’s revenue.

With Shell it is, ‘Oh yes, we found oil,’ then [Tom] Alweendo (Namibia's energy minister) says, ‘but wait, is it commercially viable?’ And without the findings, Shell is still announcing to the world that they found rich reserves.

It has the same characteristics of ReconAfrica […] putting the figures of the profits before actually knowing what is in the ground. The stock market people or investors must pay attention to these fake promises because ReconAfrica made it possible for others to follow suit.

"Climate justice is racial and social justice!"

So are there any concerns at this point from an environmental point of view? 

Currently, we have witnessed the spills in Peru and Ecuador. Namibia heavily depends on its fishing resources and having one of the oldest, most fragile, ecosystems. One has no idea how these oil spills could impact, not only marine life, but also the land once it hits the shores.

So there are fears of what oil extraction could do to Namibia’s pristine coastline?

I can’t imagine it. It will definitely impact the marine life and the ocean - being one of the biggest carbon absorbers - we have to protect it, especially [here in] Namibia, where we are witnessing on-going droughts in some parts of the country already.

Also, we forget that Shell was one of the worst collaborators of the Apartheid regime (which militarily occupied Namibia) and were funding the South African army at the time, even after the international embargo had been imposed on the country because of its stance on human and racial rights in Namibia, not to mention the illegal occupation of Namibia by the South African Apartheid regime.

The same people [politicians] who apparently fought in the liberation struggle are now in bed with the companies that made them leave Namibia in the first place. 

Isn’t this the irony of the results of African liberation politics? The same is also happening in South Africa. 

Shell was ordered to cut its emissions in the Netherlands, [which is] why now they are moving their headquarters to London so they can continue looting while they promise to cut emissions on social media.

Why do you think this is so?

Because today development is rooted in colonial practices, making Africa believe that we need these resources so we can catch up to the global north, when that wealth was only possible through colonialism.

Namibia, Nigeria, and South Africa have the highest unemployment rates on the continent and yet are countries that are highly rich in minerals, so why have they not benefited the people to this day, when at least during the Apartheid era Namibians got housing and did not have to pay for water? Climate justice is racial and social justice!

Image by Peter Prokosch / GRID-Arendal