Crypto Companies Raising Funds to Purchase Oil and Gas Exploration Blocks in the DRC

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The Demo­c­ra­t­ic Repub­lic of Con­go is offer­ing cryp­to firms an oppor­tu­ni­ty to bid for oil and gas explo­ration areas.

This auc­tion comes as west­ern gov­ern­ments des­per­ate to shore up addi­tion­al oil pro­duc­tion call on the African nation to boost its output.

Min­is­ter of Hydro­car­bons Didi­er Budim­bu said that auc­tion­ing off the explo­ration areas could gen­er­ate the income nec­es­sary for build­ing schools, offices, and road infra­struc­ture. He added that it was his nation’s pre­rog­a­tive to exploit its nat­ur­al resources as a sov­er­eign country.

The cen­tral African nation has con­cen­trat­ed its oil and gas oper­a­tions on explo­ration blocks lin­ing its west coast. It pro­duces about 25,000 bar­rels of crude oil per day.

Calls for greater out­put came after U.S. pres­i­dent Joe Biden vis­it­ed Sau­di Ara­bia in the wake of the Rus­sia-Ukraine war to con­vince lead­ers to pump more oil. Cor­rup­tion and envi­ron­men­tal con­cerns held back fur­ther explo­ration in the DRC.

But now, the hydro­car­bons min­is­ter says noth­ing will stop the coun­try from auc­tion­ing off tracts of envi­ron­men­tal­ly sig­nif­i­cant land in the Virun­ga Nation­al Park and a major car­bon sink, the Curvette Central.

Flowcarbon creates RedemptionDAO to bid for DRC exploration block

While the auc­tion is geared toward oil and nat­ur­al gas giants, Budim­bu said that the coun­try would accept bids from cryp­to and car­bon-cred­it firms pro­vid­ed the com­pa­nies had reli­able finan­cial support.

Flow­car­bon, a com­pa­ny co-found­ed by dis­graced WeWork co-founder Adam Neu­mann, is inter­est­ed in the project. Flow­car­bon aims to issue tokens to com­pa­nies pur­chas­ing car­bon cred­its, which can be burned when a com­pa­ny retires its cred­its. Last month, the com­pa­ny announced a delay in the token launch due to cur­rent mar­ket conditions.

Project devel­op­ers issue car­bon cred­its to major com­pa­nies look­ing to off­set their car­bon emis­sions. The sale of one car­bon cred­it is a pledge that the com­pa­ny removes or pre­vents one met­ric ton of car­bon from enter­ing the atmosphere.

With the DRC block auc­tion in mind, Flow­car­bon amassed staff and resources to oper­ate Redemp­tion­DAO, a decen­tral­ized autonomous orga­ni­za­tion ded­i­cat­ed to buy­ing an auc­tioned block for issu­ing “avoid­ed emis­sions” cred­its. While the DAO hopes to raise $50 mil­lion, it has thus far amassed only $2.57 mil­lion with $74,000 in pledges. Con­tri­bu­tions and pledges were made in USDC, a type of cryp­to sta­ble­coin pegged to the U.S. dol­lar. The DAO has until Feb­ru­ary 2023 to raise funding.

Companies bidding for land could face cash flow problems

While Flow­car­bon was an ear­ly pro­po­nent of car­bon-cred­it tok­eniza­tion, no prece­dent exists for bring­ing avoid­ed oil and gas explo­ration cred­its to mar­ket. Accord­ing to ana­lysts, devel­op­ing such a method could take up to two years. Fur­ther­more, one ana­lyst point­ed out that com­pa­nies involved in the busi­ness could soon face cash flow prob­lems, con­sid­er­ing the high cost of acquir­ing blocks.

Kli­maDAO and Tou­can Pro­to­col Asso­ci­a­tion began tok­eniz­ing car­bon cred­its in 2021, cre­at­ing a sup­ply-and-demand mar­ket with greater price transparency.

Disclaimer

All the infor­ma­tion con­tained on our web­site is pub­lished in good faith and for gen­er­al infor­ma­tion pur­pos­es only. Any action the read­er takes upon the infor­ma­tion found on our web­site is strict­ly at their own risk.

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