Fresh concerns over huge fossil fuel auction in DRC after government signs first gas production sharing agreements
September 29, 2023
The government of the Democratic Republic of Congo (DRC) has awarded the first contracts in an auction of 30 oil and gas blocks in the tropical forest country to a forfeited company in the US and to another with no known experience in the industry, renewing concerns over the controversial tender.
At a ceremony in Kinshasa on 9 September, Hydrocarbons Minister Didier Budimbu and Finance Minister Nicolas Kazadi hailed the signing of production sharing agreements with Winds Exploration and Production LLC and Alfajiri Energy for the exploitation of two gas blocks in Lake Kivu, in the east of the country.
While some experts have called for the safe and gradual extraction of methane from the lake to provide electricity to the area and to reduce the risk of it escaping and asphyxiating local people, questions have emerged over the government’s due diligence in the selection of the companies. Houston-based Winds Exploration and Production, winner of the Idjwi gas block, had its certificate of organisation revoked by the state of Texas in July 2023 for alleged tax breaches, meaning the company is legally inactive and barred from conducting business there.*
Meanwhile, the winner of the Lwandjofu block, Canada-based Alfajiri Energy, appears to have been incorporated only in January 2022, six months before the launch of the auction. Little information is publically available about its track record in the industry.
Despite Mr. Budimbu’s attempts to present the auction as a public, transparent, and legally compliant process, the government has yet to publish the contracts, which must specify the amount of the ‘signature bonus’ to be paid upon signature, according to Congolese law.
The third firm to win a Kivu gas block in January 2023, US-based Symbion Energy, appears not to have signed a contract yet. The company is known for its wartime contracts in Iraq and Afghanistan.
So far, Perenco is the only significant oil company to have confirmed interest in the auction. The Anglo-French outfit, which is currently being sued in France for environmental damage and is under investigation for corruption, is placed to bid for the Yema II and Nganzi oil blocks on DRC’s western coast, after it donated four Toyota Land Cruisers to DRC’s Hydrocarbons Ministry in July.
Expressions of interest in blocks in war-torn Ituri and North Kivu Provinces, including two overlapping the world-heritage Virunga National Park, are due in the coming weeks.
Joe Eisen, Executive Director of Rainforest Foundation UK, said, “This opaque sell-off of fossil fuel concessions just three months before presidential elections are due in DRC raises serious questions about who really stands to benefit. There is still time for DRC to chart a different course to a low-carbon future, one that harnesses the country’s immense potential in renewables and that is rooted in the rights of local communities.”
Since its launch in July 2022, the auction of 30 oil and gas blocks has drawn criticism from environmental and rights groups. Many of the oil blocks overlap protected areas, carbon-rich peatlands and the ancestral lands of thousands of local communities.
"The selling of oil and gas blocks - which we continue to denounce to this day - escapes the principle of transparency that should underpin the natural resources sector in our country. We want to know how much the government is earning from the contracts that have already been signed, and how this will be redistributed” added Blaise Mudodosi, National Coordinator of the NGO Actions pour la Promotion et Protection des Peuples et Espèces Menacés (APEM).
 Arrêté interministériel n°M-HYD/001/DBN/CAB/MIN.HYD/2021 et n°CAB/MIN/FINANCES/2021/147 du 28/10 portant fixation des taux des droits, taxes, et redevances à percevoir à l'initiative du ministère des Hydrocarbures, 28 October 2021, https://drive.google.com/file/d/1A7WKhcCcEnLR3-up7TnjZf00bOI6aZkf/view
*Update 18/10/2023: The company has since claimed that this was for a minor administrative oversight that is being resolved.