Activists condemn ReconAfrica’s Namibian Stock Exchange listing over environmental and financial risks

The Economic and Social Justice Trust (ESJT) is worried that Namibian investors could pump public money into the operations of the Canadian company, Reconnaissance Energy Africa (ReconAfrica).

ReconAfrica, which has been searching for oil in the Kavango East region for the past four years, was listed on the Namibian Stock Exchange (NSX) on 1 November.

ESJT trustee Rinaani Musutua says ReconAfrica listing on the NSX amid the ongoing criticism around its operations in Namibia is a concern.

“The company’s statement of reserves notes: ‘As of 31 March 2024, the company has no reserves’ but they represent otherwise to investors, and we are concerned that Namibian pension funds could be at risk,” Musutua adds.

Activists have over the years blasted ReconAfrica for making money from the perception that there is oil in the Kavango East.

The company announced its dual listing on the NSX last week, with the assistance of Cirrus Capital which facilitated the listing.

“The dual listing, which was celebrated with a bell-ringing ceremony on 1 November, marks a milestone for Namibia, the NSX and Cirrus: the only current local listing of an oil exploration company,” Cirrus Capital noted in a statement yesterday.

The firm said, given ReconAfrica’s ongoing operations in Namibia, the NSX listing allows for increased engagement with the local market and allows Namibians to receive additional information regarding ReconAfrica, as well as the option to acquire shares in the company.

This government mandate, according to the NSX website, encourages pension funds to invest in the domestic market and use Namibian savings to stimulate development.

“As with all publicly-traded entities, potential investors are responsible for their own research into listed entities, and for consulting financial and other qualified advisers to assist in the decision of where and how to invest one’s funds,” Cirrus Capital noted.

NSX chief executive Tiaan Bazuin defended the listing, saying it allows the public to better understand the company’s operations in Namibia.

“Part of the reason to list is to give better and detailed information as to their operations, which I believe they shall be doing soon. The NSX has specific processes to follow for dual listings, but they do not contain environmental assessments. That’s handled by the licensing authority,” Bazuin says.

ReconAfrica is being advised on its oil and gas explorations by controversial businessman James Jay Park, dubbed the ‘oil kingmaker’ by international media.

Musutua says someone with Park’s background should pass due diligence.

Park has been connected to deals involving money laundering and corruption in Chad, Somalia and Tunisia.

“His dealings in Iraq and Kurdistan bring into question his independence from the oil companies who pay him while he writes legislation which will affect them.

Listing the company to the stock exchange raises multiple red flags,” Musutua says.

Questions sent to ReconAfrica were not responded to at the time of publication.

The Namibian reported last year that ReconAfrica may have fraudulently misled investors by misrepresenting its work on the project, according to several experts and allegations in a whistleblower complaint filed with the United States Securities and Exchange Commission.

ReconAfrica owns 90% of the Namibia oil exploration project, while state-owned National Petroleum Corporation of Namibia owns 10%.

The licence area overlaps with the Kavango-Zambezi Transfrontier Conservation Area and sits upstream from the Okavango Delta – a unique and ecologically sensitive water sourse.