In January of this year, villagers in the remote rural north of Namibia
effectively woke up to see a new local landmark.
This oil drilling tower is completely new.
It's a test well set up by a North American oil and gas company.
Since then, it's been drilling 24 hours a day
on these formerly quiet and mostly untouched lands.
The test well is the first of 3 operated by ReconAfrica,
a Canadian company that has secured exploration licences
in Namibia and Botswana.
For their investors, they projected the biggest global oil fines
in recent history.
But even though this is a very remote place,
that doesn't mean it's detached from other important areas.
Quite the contrary.
The region's main source of water is the Kavango River,
a tributary of the world-famous Okavango Delta,
a UNESCO World Heritage Site.
Drilling for oil here is bad news for many reasons:
for the indigenous San people,
for the spectacular diversity of wildlife downstream,
but also - it appears - for the investors themselves.
There's a black gold rush going on in the world-famous Kavango Basin.
ReconAfrica has secured a license for more than 35,000 km2 in the region,
spreading across two countries.
According to the information disclosed to shareholders,
the area holds significant amounts of oil and gas
Drilling began this year at two test wells in Namibia,
and several more are already planned.
They're all located on the Namibian side, along the Omatoko River,
a branch of the Okavango River.
Striking oil will certainly have heavy consequences for the area:
a network of rigs, pipelines, pumping stations, roads and buildings
would sprawl across an environmentally sensitive, semi-arid region
that is home to Africa’s largest remaining population of Savannah elephants,
as well as numerous threatened or endangered species.
These infrastructure developments could have a substantial effect
on important wildlife habitats, migratory pathways,
and biodiversity in general.
In order to really understand what this means and why it matters so much,
we have to take a look at this regional map.
The Kavango Basin,
which spans northeastern Namibia and northwestern Botswana,
is part of the Kalahari Desert.
In an otherwise extremely dry environment, the Okavango River is like an oasis,
a lush lifeline flowing from the highlands of Angola through northern Namibia
and emptying out into the Okavango Delta in northwest Botswana.
It comprises a system of several national parks,
as well as a gigantic multi-country conservation project:
the Kavango–Zambezi Transfrontier Conservation Area, or KAZA for short.
It's the largest conservation area on the continent,
with an area twice as large as the entire U.K.
Yet the true pearl of the region,
the Saffire of the southern African crown jewels,
is this pan-shaped wetland on the southeastern edge.
The Okavango Delta is a unique cradle of biodiversity that pulses with life.
One of the world's largest inland deltas,
it's a place of untouched wilderness, attracting animals from kilometers around
and creating Africa's greatest concentration of wildlife.
Here, you will find everything,
from antelopes, leopards, hippos and crocodiles,
to more unknown and outlandish species, like bat-eared foxes
and galago bush babies,
or endangered ones, like the African Wild Dog.
The source of all this lush life is the more than 2 trillion gallons of pristine
ice-cold water that flows from the Angolan highlands into the Delta each year.
The engineers, however, the ones who keep everything in shape
are the majestic savannah elephants.
They come to the so-called panhandle for water
and act as a sort of landscape architect,
carving channels and leaving behind a mosaic of rivers
for a rich and diverse ecosystem.
This creates a network of millions of small and larger islands,
each with a termite colony on top and a separate micro system surrounding it.
Travelling down the path of the delta, the elephants lead
and the flood follows along the channels
where new water revives old and dormant soil.
Several other species depend on the elephants' activity
as their dung provides valuable nutrition
or even nesting material for animals like these squirrels.
On the edges of the delta, the elephants start mining below the surface
for edible grass roots.
They cover hundreds of kilometers in search of water,
constituting the largest migration in the world.
And the more we move to the fringes, the better we can picture where we are
and start to understand what this region would be like
without its pristine waters.
Here, we can experience the relentless dust and heat of the Kalahari Desert.
It's a bitter fight for the last traces of water
left in this harsh and merciless environment.
But let's move back upstream
to have a look at why ReconAfrica's activity is causing such major concern
and how it could affect the region.
These are the areas in Namibia and Botswana
that have been licensed by the Canadian Petroleum Exploration Company.
There are three national parks either within sandwiched between,
or right next to these licensed areas,
with elephants moving naturally between them
and ultimately into the Okavango Delta.
The test wells and the potentially hundreds more still to come
along with all the associated infrastructure
are located right in this area.
It cuts across the elephants' paths of migration,
which would severely disturb their natural movements.
Elephants that are badly needed within the Delta's ecosystem.
The issue that really gets alarm bells ringing
is the question of how this oil will be extracted.
Naturally, the contentious word 'fracking' comes up.
Hydraulic fracturing - or fracking - is a method
that has turned the global fossil fuel industry upside down
and made it big business again.
It took some time for fracking to boom and become as widespread as it is today.
But it all started off with a specific problem:
how to crack open rocks deep below the Earth's surface
to access trapped fossil fuel deposits.
The answer is fracking:
large quantities of water, chemicals and sand are blasted into these rock formations
at pressures high enough to crack them,
allowing the trapped oil and gas to flow up to the surface.
But it wasn't until the end of the 20th century,
that 2 key changes helped spark fracking's current boom.
In the late 1990s, Mitchell Energy started experimenting with the fracking water mix
to unlock gas trapped in shale.
It was at the Barnett Shale formation in North Texas that Mitchell's engineer,
Nicholas Steinsberger, found the perfect mix of water, chemicals and sand.
He called it "slick water fracking".
Slick water increase the productive potential of fracking enormously,
starting an oil boom in Texas and across North America.
Yet the environmental aspect of this technology makes it highly controversial.
This is down to many reasons.
The production chain of unlocking natural gas and crude oil through fracking
involves several high risk elements that have the potential
to severely damage the environment or local ecosystems.
Over a million gallons of water are needed to frack just one single well,
meaning enormous consumption of this valuable resource.
The chemicals used for the slick water are considered highly hazardous.
They can contaminate local groundwater and waterways
through inadequately built wells or contaminated wastewater stored nearby.
Because it's impossible to completely control where fractures appear
in the rock formation,
fluids can escape through unintended fracture extensions,
contaminating otherwise clean water.
It's not uncommon that methane, one of the most potent greenhouse gases,
escapes either on purpose or accidentally from fracking sites,
polluting the air and accelerating the impact of climate change.
Generally, fracking in a mostly untouched region
with a rich and delicate ecosystem is not a good idea.
ReconAfrica's intention is to open up a "new deep sedimentary basin".
For this, they're drilling into the 9000-meter-deep sedimentary formation
of the Kavango Basin.
And the main question still remains:
is fracking part of the plan or not?
ReconAfrica's official answer to this is currently "no".
We are not interested in fracking.
But there are several indicators that have led to concern
that they aren't definitely ruling out this controversial extraction method.
Investor presentations have included such plans at several points,
mostly in the small print.
And even the research report commissioned by ReconAfrica includes
"unconventional play", as it is euphemistically called on many occassions.
ReconAfrica has changed their wording since,
crossing the term fracking out of their vocabulary.
Is that the word "unconventional resources" is no longer part of the vocabulary.
Nevertheless, they apparently still base all their oil production
and revenue estimates on this ominous technique.
Another notable and relevant point that warrants a closer look
is the people involved.
Scott Evans, ReconAfrica's CEO,
has decades of technical and operational experience.
Fracking oil in the USA while working for Halliburton.
Craig Steinke,
was involved in several fracking activities in Spain and Mexico
with his company Renaissance Oil Corp.
And then: Nick Steinsberger, the so-called father of fracking -
Remember? He's the SVP for drilling and completions.
Whatever the case may be,
the Namibian government reiterates that it has not given permission to frack.
In fact, the government talks about only issuing an exploration licence
with no production licence granted.
By far the most serious allegations against ReconAfrica came from this article
in May 2021.
A report leaked to National Geographic by a whistleblower
alleges that ReconAfrica failed to disclose crucial information
about their plans to search for oil across the Kavango Basin,
in order to drive up stock prices.
The company's value quintupled to over 1 bn dollars over the course of this year
with stock prices skyrocketing.
Everybody is an investor, I'm an investor, everybody who's working on this project,
technically is also an investor.
According to the same report,
the company raised millions through fraudulent means,
with several top executives selling their shares
while ReconAfrica promoted their stock through fake or invalid announcements.
But how?
Well, ReconAfrica has never missed a chance to proclaim
what an incredible business opportunity this is.
They've underpinned their bold claims
by reiterating that all the signs from the test wells
are looking extremely promising.
This naturally inflates the stock price, yes,
but with only 1 test well fully operational and so far no seismic surveys in place,
such claims do seem to be extremely far-fetched.
If this and all the other information in the leaked report turns out to be true,
ReconAfrica's company officers would have been putting out positive news
about their oil drilling plans while allegedly selling their shares
and misleading investors.
It's a practice known as "stock scalping",
basically stuffing your pockets through insider trading.
All right. Time for a short disclaimer.
Please bear in mind that all this is considered a serious crime.
All the allegations stem from a National Geographic article
reporting on a leaked document of undisclosed and protected origin.
None of ReconAfrica's executives have been charged or convicted anyway so far.
We'll post a link to the article in the description of this video,
so you can read yourself.
Without doubt,
the consequences of oil drilling in this region could be horrendous.
We mustn’t forget what the real treasures of the Kavango Basin are:
an ecosystem of rich and diverse wildlife, and the water that feeds it.
To really understand the Okavango is to comprehend the flow
and the purpose of its precious water.
It nourishes one of the last strongholds of the true wilderness
and everything that lives within it.
Every single piece of life in this region is part of the iconic river.
It's one of the very few places left on Earth
where giants can roam free,
where their offspring can trust in the future of their species.
It's the crown jewel of this planet and its future is entirely in our hands.
We can choose to protect it
or we can stand back and bear witness as a complex ecosystem disappears
in exchange for nothing
but some fast profit.
So what does this is all mean?
Is ReconAfrica planning to drill and frack in a highly sensitive region?
Or is this all just a huge scam
and is such a bigger problem for the investors than the ecosystem?
The answer is we don't know.
We'll have to wait and see.
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