Skip to main content
exclusive

According to the Canadians interviewed by the RCMP, the probe seems focused on two issues: ReconAfrica’s ties to politically connected figures in Namibia and the company’s stock promotion activities.John Grobler/The Globe and Mail

The RCMP have launched an investigation into a Canadian oil company that is drilling exploration wells near the ecologically sensitive Okavango River in southern Africa, The Globe and Mail has learned.

RCMP investigators, in the early stages of a probe that arose after multiple complaints from environmentalists, have interviewed at least two Canadians who have been critical of the activities of Reconnaissance Energy Africa Ltd. RECO-X (ReconAfrica), a Calgary-based company with a drilling program in Namibia.

In an e-mail to one of those witnesses, an RCMP officer said the investigation is looking at alleged offences under a Canadian law prohibiting the corruption of foreign public officials, as well as possible securities fraud. The police have made no formal allegation of wrongdoing against ReconAfrica, and the investigation could conclude that no charges are warranted.

As Calgary’s ReconAfrica drills for Namibian oil, a global outcry over endangered elephants grows

ReconAfrica defends itself after short seller says Canadian oil company is ‘drilling blind’ in Namibia

According to the Canadians interviewed by the RCMP, the probe seems focused on two issues: ReconAfrica’s ties to politically connected figures in Namibia and the company’s stock promotion activities, including its public statements about the geology of the exploration site.

In response to questions from The Globe, the company said it was not aware of the investigation. The RCMP told The Globe they could neither confirm nor deny the existence of the investigation.

ReconAfrica has been surrounded by controversy since it first announced in 2020 that it would begin exploring for oil in Namibia, near elephant migration routes and a river that flows into the famed Okavango Delta, a UNESCO World Heritage Site that attracts thousands of tourists each year.

The dispute has become a global issue, with celebrities such as Prince Harry and Hollywood star Leonardo DiCaprio denouncing the oil project. ReconAfrica’s exploration licences cover a vast territory of about 35,000 square kilometres in northeastern Namibia and northwestern Botswana, near two national parks. The company says it is “committed to minimal disturbance of habitat” and will follow environmental best practices in all areas.

In recent statements, it said its drilling has found “good oil and gas shows” but has not said whether extracting any hydrocarbons would be economically feasible. It reported a loss of $10.6-million in the first quarter of this year.

The Globe reported last year that ReconAfrica’s stock price soared from about 50 cents to more than $12 on the TSX Venture Exchange in an 18-month period after an aggressive promotional campaign, including a series of speculative articles in online media, some of which were paid for by the company. The stock now trades at less than $5.

Complaints submitted to U.S. and British Columbia securities regulators have alleged that the company engaged in deceptive stock promotion and inadequate disclosures. The company has denied the allegations and says it operates in full compliance with all laws and regulations.

The Globe also reported last year that in 2020 ReconAfrica had briefly hired a Namibian businessman, Knowledge Katti, who has been the subject of many Namibian media reports for his close links to senior Namibian officials, including President Hage Geingob. He has reportedly travelled abroad with Mr. Geingob and even paid some of his medical bills. The company says it no longer has a business relationship with Mr. Katti.

ReconAfrica has faced persistent opposition to its exploration project in Namibia over the past two years. Most recently, community forest and conservation groups have asked the High Court of Namibia to suspend the company’s exploration activities, pending an appeal against the latest environmental approval for the drilling. The company is opposing the request, and the court is expected to issue a ruling on Aug. 3.

In another recent development, a Namibian parliamentary committee has reported that ReconAfrica failed to obtain necessary water and land-use permits in the early phase of its drilling. The company “should have been penalized as per the provisions of the law,” the report said. The company responded to questions about the report by saying it has now obtained all the required water and land-use permits.

Two RCMP investigators travelled to Nova Scotia in May to interview the two Canadians – an environmental activist and a geologist – who had raised questions about ReconAfrica’s geological claims and drilling activities in Namibia. The investigators work for the Sensitive and International Investigations section of the RCMP National Division.

In e-mails seen by The Globe, one of the investigators, Corporal Karla Kincade, said the RCMP became involved after Global Affairs Canada sent the force a file on the oil company.

“They escalated the file to us last year after receiving your letter and after being alerted to all the social media and investigative reporting on the company,” she wrote in early May to one of the Canadian witnesses, Rob Parker, an activist at the Economic and Social Justice Trust of Namibia.

Global Affairs Canada spokesperson Sabrine Barakat, in response to questions from The Globe, would not confirm the department’s role in the matter. She said the department “does not comment on RCMP matters and does not accept criminal complaints for referral to the RCMP.”

In a separate e-mail to Mr. Parker, Corp. Kincade cited the federal Corruption of Foreign Public Officials Act (CFPOA), which prohibits Canadian companies from bribing public officials of foreign governments in exchange for contracts or other decisions that benefit their businesses.

“We are investigating alleged offences contrary to the CFPOA (bribing foreign public officials) by a Canadian company and/or employees or representatives of that company, and possibly also securities fraud,” she wrote May 2.

The media relations office of the RCMP National Division, in response to queries from The Globe, said: “The RCMP does not confirm or deny the existence of a criminal investigation unless charges would be laid. No further comment will be made at this time.”

ReconAfrica, in response to questions from The Globe, said it was “not aware of the alleged RCMP investigation, ongoing or otherwise.”

Mr. Parker said the investigators arranged to meet with him at an RCMP station near his Nova Scotia home on May 18 and spoke with him for more than four hours about the allegations regarding foreign officials and securities rules. “They told me at the beginning what they were interested in, and they essentially put a voice recorder on the table and said, ‘Talk,’” he told The Globe.

“I’m really happy about it. The RCMP has the capacity and the time and power and resources to get answers that we simply cannot. This is a serious organization, and they have the teeth and the power to do a proper investigation, which is what we’ve been asking for a long time.”

Elisabeth Kosters, an independent geologist and former academic and government scientist who has published a detailed critique of ReconAfrica’s claims about the geology of the exploration site, said the RCMP investigators interviewed her for more than an hour in a recorded conversation at an RCMP station near her home in Nova Scotia in May.

“They were trying to get an impression from me of whether I’m really factual and is this real,” she told The Globe.

“They had a printout of my article and they had made notes and questions. They really tried to understand, as much as they could, the geologic underpinning of this investment.”

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.