Amid growing opposition to the Shell oil and gas exploration venture off the Eastern Cape’s Wild Coast, former labour union stalwart turned businessman Johnny Copelyn has emerged as a key figure behind the seismic blasting drive.

So far, public attention has focused mainly on the Anglo-Dutch fossil-fuel giant, including a last-minute high court interdict application by fishing and environmental groups against Shell to end the exploration.

The application was dismissed on Friday, but a separate group of community members, fishers and environmentalists has lodged a second urgent interdict due to be heard in Makhanda on December 14.

More than 380,000 people have signed an online petition urging the government to pull the plug on the project, and further public protests are expected in several coastal centres over the coming days.

But behind the scenes, in his capacity as a director and major shareholder representative in a British-based oil and gas exploration company, Copelyn has been closely involved in the company’s drive to advance oil and gas exploration rights off the Wild Coast.

Before joining the corporate world, Copelyn was general secretary of the Southern African Clothing and Textile Workers Union and an ANC MP. Now 71, he is CEO of Hosken Consolidated Investments (HCI), the black empowerment company seeded with union member money that owns or has significant interests in gambling, hotels, textiles, transport, media and mining.

Since 2014, Copelyn has been a nonexecutive director of Impact Oil and Gas (IOG) and in May 2020 he took over as nonexecutive chair of IOG, with HCI as the largest beneficial shareholder.

It was IOG that secured the original exploration rights for the Wild Coast in 2014 and later farmed out some of its financial interests to ExxonMobil and a subsidiary of the Norwegian Statoil group, which held 40% and 35% interests respectively.

However, according to a statement on IOG’s website dated October 28 2020, both groups bailed out, creating a gap for Shell to enter as an exploration partner.

In terms of this new farm-in agreement, IOG retains a 50% interest with Shell holding the remaining 50% and acting as the exploration operator. According to the IOG website, this coincided with a decision by the South African government to grant a second renewal period of the original IOG licence.

In the latest financial statements archived in the UK government’s Companies House records, IOG acknowledges that it does not have any conventional earnings. It had not generated any operating income since it was incorporated in 2011 and had run at an operating loss since then (aside from income derived by farm-out activity).

“The company does not currently produce oil or gas or have any reserves and may never produce oil or gas or have any earnings.”

As a result, IOG said in its financial statements, expansion of the company could require future debts and equity financing or the need to raise capital through further farm-downs to Shell and other fossil-fuel majors.

Significantly, IOG said in a press statement that one of its subsidiary companies recently (in May 2020) acquired a 90% working interest in a second exploration zone (“Area 2″) further off the Wild Coast, along with the Singapore-based Silver Wave Energy group headed by businessman Minn Minn Oung.

Oung’s company has previously secured fossil-fuel exploration rights from the Myanmar military junta and has posted pictures on its website of Oung standing next to former president Jacob Zuma, apparently taken during a visit to SA in 2015. A separate IOG press release states the exploration licence for Area 2 was initially awarded to Silver Wave Energy in 2015.

In a letter to shareholders published in HCI’s latest annual report, Copelyn laments the “lack of clarity on the legal rights of explorers in South Africa, the size of the state carry, the degree of accommodation of BEE required, royalties claimable and the tax structure of production right holders”.

As a result of growing disillusion with prospecting for oil and gas in SA, he stated, “several companies with capacity to responsibly drill deep sea wells have abandoned blocks in our water”, including ExxonMobil, Equinor, BHP, Cairn, Cosmos and Anadarko.

“While there is a growing clamour against fossil fuels across many developed countries, the truth about the South African economy is its electric grid is still overwhelmingly dependent on coal-fired power stations. It has no prospects in the medium term of generating base electricity from any source other than fossil fuels.

“It should in our opinion aim to replace coal-fired power stations with gas ones and focus its efforts on technologies around carbon capture and storage rather than exclusively on wind and solar solutions to limit greenhouse gases.”

Copelyn stated that the decision by ExxonMobil and Equinor to leave the Wild Coast exploration block had left Impact Oil and Gas with “sole responsibility to meet an expensive seismic obligation” to enter the next phase of exploration.

“Notwithstanding the capital constraints imposed on us, we took the risk of IOG committing resources to this block and we advanced its exploration to the next phase on our own. IOG spent the year modelling the prospectivity of various parts of the block and attempting to attract a new supermajor to farm in. We are pleased to report we have succeeded in getting Shell Petroleum to join us as operator.”

Copelyn said IOG was looking for other partners and “the net effect of these new arrangements will hopefully be that we are left with a 30%-35% stake in the block, largely carried for both the seismic study and an exploration well, with partners committed to commissioning the seismic study at which previous partners balked”.

Copelyn did not respond to requests for comment. An IOG spokesperson declined to comment.