Oil and gas exploration auctions in the Democratic Republic of Congo have been fiercely opposed by environmentalists and Hollywood stars, but a potential solution could help everyone see the rainforest for the trees.
The Democratic Republic of Congo is opening oil and gas license auctions to crypto and carbon companies that would keep fossil fuels in the ground and sell coveted carbon credits instead.
DiCaprio, Gorillas and Adam Neumann collide
The DRC, a country of 92 million people, is not a big producer, producing just 25,000 barrels of crude oil a day (Saudi Arabia produces nine million, by comparison). But the government has long aspired to open up hydrocarbon exploration in the DRC’s vast interior – and pocket the revenue that might come with it. Last month, 27 blocks of territory were put up for sale for an oil exploration auction, including two straddling Virunga National Park, home to some of the world’s last remaining mountain gorillas, and Cuvette Central, the most great bog in the world.
The move revitalized ecological concerns that had previously stalled exploration. “A few years ago people got their noses in there, we saw actors like Ben Affleck and Leonardo di Caprio get on their high horses and ask for the project to be stopped,” said Didier Budimbud, Congolese minister. hydrocarbons. FinancialTimes. “This time we won’t stop.” Opening the auction process is a potential solution, but there are cash flow issues all around:
- Two major oil and gas developers with operations in Africa, French and Italian Eni, told the FT that they are sitting out of the auction. Major financiers, including JPMorgan Chase, Citigroup, Wells Fargo and Morgan Stanley, have refused to fund the East Africa Crude pipeline in neighboring Uganda, a sign of growing aversion to carbon-intensive projects.
- Flowcarbon, a start-up that hopes to convert carbon credits into crypto assets, has expressed interest in bidding to stop exploration and offer carbon credits on the ground instead – as has a coalition of carbon companies represented by the venture capitalist Thomas Annicq. Flowcarbon, co-founded by WeWork’s Adam Neumann, is teaming up with environmental group RedemptionDAO, to buy at least one block with backing from an oil company – the group is also trying crowdfunding, though it has raised less than $3 million of his $50 million goal.
“We are not doing this to destroy the rainforest, we are doing this for economic gain,” Budimbud added. “With or without oil, what is important is that we win.”
Where did you find all that green? What is less clear is how carbon companies will compete. “I can’t imagine a traditional carbon credit developer raising funds to be able to bid,” said Ben Rattenbury of start-up Sylvera. FT, adding that buying land or exploring could be a “catastrophic cash flow problem” for a carbon credit company. I suppose they will have to choose between an environmental catastrophe or a financial catastrophe.