Congo oil and gas auction open to start-ups

Last month, Congo put 30 oil and gas exploration blocks up for auction. Some of the exploration areas are in Virunga National Park and the Cuvette Centrale, the world’s largest tropical peatland, which naturally absorbs carbon from theatmosphere. Didier Budimbu, the hydrocarbons minister, told the Financial Times he would accept bids for exploration rights in the rainforest and peatlands from carbonmarket start-upswith nolinks to oil and gas majors as long as they had solid financial backing. Rather than explore for hydrocarbons, such groups propose keeping any oil and gas in the ground and instead generate revenue by selling carbon credits to companies looking to offset their emissions. “Ifit can help our economy and the country, why not?” Budimbu said. “We’re not doing this to destroy the rainforest, we’re doing it for economic gain . . . With or without oil, what’s importantis thatwe earn [money].” Congo produces about 25,000 barrels a day of crude oil from a small number of onshore and offshore blocks along its Atlantic coast. The government’s longheld ambitions to produce oil in other parts of the country’s interior have previously been held back by environmental concerns, corruption and a lack of exportoptions. Those challenges mean it remains uncertain how many oil and gas companies plan to participate in the licensing round. France’s TotalEnergies, which has a project in neighbouring Uganda, and Italy’s Eni, which is active in other parts of Africa, have both told the FT theywill not bid. Flowcarbon, a start-up co-founded earlier this year byWeWork co-founder Adam Neumann, is among the carbon credit groups to have expressed interest. Phil Fogel, Flowcarbon’s head of cryptocurrencies, said the company had contributed staff and resources to RedemptionDAO,a campaignorganised overmessaging platforms Telegram and Discord and founded two days before theauctionlaunchedin July. RedemptionDAO aims to buy at least one of the blocks in partnership with an oil company or through crowdfunding, and use it to issue “avoided emissions” carbon credits. It hopes to raise at least $50mn, but has so far raised $2.57mn and obtained pledges of $74,000, both in USDC, a socalled stablecoin digital currency pegged to the dollar. Venture capitalist Thomas Annicq said he had contacted the Congolese government separately on behalf of another coalition of carbon market companies thatwanted tomount a joint bidon the blocks. Companies have until February to submit bids. However, there is at present no official methodology for bringing credits from forgoneoiland gas exploration to market and analysts say that developing one could take up to twoyears.