JEANETTE DIERGAARDT
The Presidency said Canadian oil explorer Reconnaissance Africa must answer claims that it exaggerated oil discoveries in the Okavango Delta.
Presidential spokesperson Jonas Mbambo told Namibia Business Review this week that it is not the President’s role to respond to allegations raised by civil society groups.
“It’s up to ReconAfrica to respond and clarify the concerns that have been raised,” Mbambo said.
The comments come amid mounting pressure from lobby group Saving Okavango Unique Life (SOUL), which has accused ReconAfrica of misleading the public and investors about oil and gas finds in the ecologically sensitive Kavango Basin.
Two weeks ago, ReconAfrica executives alongside partners National Petroleum Corporation of Namibia (Namcor), and BW Energy met President Netumbo Nandi-Ndaitwah to brief her on their latest drilling activities.
During that meeting, the company confirmed the presence of hydrocarbons but stopped short of saying whether the discovery is commercially viable.
ReconAfrica chief executive Brian Reinsborough told the President that the company had completed drilling at the Kavango West well and that early results were encouraging.
However, SOUL has strongly challenged those claims.
In a statement issued last week, SOUL’s Reinhold Mangundu and Rob Parker accused ReconAfrica of “cherry-picking” information to create the impression of a major oil discovery. SOUL questioned a recent announcement by ReconAfrica and Namcor claiming “64 net metres of hydrocarbon pay.”
“Legitimate oil discoveries are marked by clear disclosure of the type of hydrocarbons, the reservoir structure and confirmed flow rates. That has not happened here,” SOUL said.
The group further accused ReconAfrica of behaviour similar to a “pump-and-dump” scheme, where companies hype discoveries to boost share prices without proof of commercial oil.
“Put simply, ReconAfrica and its officials keep saying they have found oil when they have not,” SOUL said. SOUL also made reference to past public statements made by company executives claiming oil was flowing in the Kavango Basin.
ReconAfrica has faced multiple allegations of misleading investors and overstating oil discoveries. In 2022 and 2023, the company was targeted by class-action lawsuits in the U.S. and Canada, claiming it made materially false or misleading statements about its Okavango Delta project, artificially inflating its share price. The company later settled the lawsuits for a combined total of roughly US$7.05 million (N$144 million) and CAD 5.07 million (N$105 million) without admitting liability. Environmental groups and watchdogs have also accused ReconAfrica of misrepresenting its drilling activities, failing to disclose environmental risks, and promoting exaggerated claims about oil reserves, raising ongoing questions about the transparency of its operations.
A system where oil companies overpromise on oil availability is normally referred to as a pump-and-dump scheme and is meant to push up share prices.
This is when a company falsely declares oil availability or an oil discovery to inflate its share price so that insiders can sell their shares for a profit. The illegal practice is primarily known as a “pump and dump” scheme.
FIGHT YOUR FIRES
Responding to questions, Mbambo told the Namibia Business Review that the Presidency’s meeting with ReconAfrica was purely informational.
“ReconAfrica’s leadership did meet with Her Excellency the President to brief the Presidency on their activities and the announcement they intended to make. That engagement was purely informational,” he said.
The Presidency, he added, will not comment on the allegations.
“ReconAfrica, as the company involved, must address and account for matters related to its operations and public claims,” Mbambo said.
Namcor spokesperson Paulo Coelho said the state owned oil company was not in a position to comment, referring questions back to ReconAfrica.
“Namcor wouldn’t be able to comment on this, you may have to ask them(ReconAfrica) directly,” he said.
ReconAfrica did not respond to questions sent by Namibia Business Review.
Economists with deep understanding of the oil industry told Namibia Business Review that it is not uncommon for companies listed on any stock exchange to inflate their findings to, in turn, increase their price on the stock market.
“One has seen that in the past, especially with companies that do not follow strict guidelines on ethical conduct. It is not unheard of,” the source said
The sources however told Namibia Business Review that BW Energy, which acquired an aggregate of shares from ReconAfrica last year, to the value of N$320 million (USD16 million), has improved trust in the mining company.
On 22 March 2025, during the announcement of the new Cabinet, President Nandi-Ndaitwah said, “The new emerging industries of oil and gas need to be managed in a manner that maximises benefits for all Namibians. Therefore, the management of these industries will fall under the Office of the President.”
SHARE PRICE BOOM
After ReconAfrica announced its discoveries in Namibia on 3 December, ReconAfrica’s shares increased overnight by 72% at the Toronto Stock Exchange.
According to market indicators on 2 December, the closing price for the company was CAD 0.4800 (N$13.28), and the closing price on 03 December was CAD 0.6600 (N$18.27).
Recon Africa has been involved in a class action lawsuit, with a class period of which a settlement has been reached in 2024,.
Recon Africa paid an approximate of US$9.42 million, a total of N$159.62 million. Despite paying the settlement to shareholders, the company still denied any wrongdoing. The settlement claim deadline was in April 2025, but late settlement claims are still considered after review.
COMMENTS