DRC - Congo (K)

Tuesday, May 26 2009 by
15

NO TA ON THIS THREAD PLEASE

The Democratic Republic of Congo (Congo-Kinshasa) is a country where SOCO has an increasing interest.

At present, the only fully-ratified block is Nganzi, where SOCO's subsidiary holds an 85% stake. As I indicated in the recent thread here http://www.stockopedia.com/forum/view/28022/interim-management-statement there appear to be several large prospects on the block and they are likely to be drilled in Q2 2010 - and look sufficiently interesting that they may not be farmed-down first!

There are at least two other blocks of interest to SOCO in DRC, with Block 5 (including part of Lake Edward) the furthest advanced, having a signed PSC and awaiting only the Presidential Decree. SOCO has a 38.25% stake there and will drill two explo wells in the first five years after the decree. Partner Dominion speaks very highly of the potential of Block 5, especially under Lake Edward which may well turn out to be an analogue of Lake Albert to the north, which has provided company-making discoveries for Tullow and Heritage.

This thread is intended to discuss all activities of SOCO within the Democratic Republic of Congo.


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SOCO International plc is an international oil and gas exploration and production company. The Company has oil and gas interests in Vietnam, which includes Block 9-2 and Block 16-1; Republic of Congo (Brazzaville), which includes Marine XI Block and Marine XIV Block, the Democratic Republic of Congo (Kinshasa), consists of Nganzi block and Block V and Angola, which include Cabinda Onshore North Block. The Company's operations are located in South East Asia and Africa. It holds its interests in the Republic of Congo (Brazzaville), through its 85%-owned subsidiary, SOCO Exploration and Production Congo SA (SOCO EPC). It holds its interests in the Democratic Republic of Congo (Kinshasa) through its 85%-owned subsidiary SOCO Exploration and Production DRC Sprl. The Company’s net entitlement volumes were approximately 15,500 barrels of oil equivalent per day. more »

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493 Posts on this Thread show/hide all

emptyend 22nd Sep '12 274 of 493
2

It looks as if the DRC government are going to follow a sensible pragmatic approach on Block V:

The Democratic Republic of Congo will allow exploration work inside Africa's oldest national park if significant oil deposits are found there, the country's hydrocarbons minister said on Saturday.......

"The DRC has the right to know what resources it has under the earth, even if it's in the park or the forest, anywhere," minister Crispin Atama Tabe told Reuters in an interview.

It is currently against Congolese law to prospect or exploit minerals inside the country's national parks, but Atama Tabe said the legislation could be reviewed.

"We're going to evaluate the quantity of the deposit. If it's very significant we'll compare the value of the park with the oil... We'll see whether we'll respect the park or not. It's up to us," he said, adding that exploration could take up to three years.

And, as we know, SOCO have said they will be going nowhere near the gorillas in any case.....

SOCO adheres to all the DRC’s environmental preservation regulations, which include the continual use of environmental impact studies at each stage of any of our activities. We are also working closely with the Congolese Institute for Nature Conservation (‘ICCN’).

We would like to emphasise that we are at the preliminary phase of exploration for possible hydrocarbons and, even if successful, we are several years away from concluding our scientific research. At this stage, no drilling has been planned.

‘Block V’ currently encompasses an area of the Virunga National Park, including a part of Lake Edward. However, we would like to make it clear that Block V is not located close to the Mikeno Sector, which is home to the famous Mountain Gorillas.  This has been subject to much inaccurate media speculation.

Furthermore, SOCO has stated it will never seek to have operations in the mountain gorilla habitat, the Virunga Volcanoes or the Virunga equatorial rainforest.

The initial exploration phase includes an aerial survey which would then be followed by a survey on Lake Edward, both commissioned by the DRC Government.  We do not expect any animals or fish will be harmed as a direct result of our activities.

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loglorry 23rd Sep '12 275 of 493

"The Democratic Republic of Congo will allow exploration work inside Africa's oldest national park if significant oil deposits are found there, the country's hydrocarbons minister said on Saturday......."

This made me laugh - how do they find significant deposits without exploring for them in the first place? Rather a circular statement no?

Log

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swanvesta 23rd Sep '12 276 of 493

In reply to emptyend, post #274

"We're going to evaluate the quantity of the deposit. If it's very significant we'll compare the value of the park with the oil... We'll see whether we'll respect the park or not. It's up to us," he said, adding that exploration could take up to three years.

I wish they could have found a better way of putting it. They have a responsibility to "respect" the park whatever they decide to do. So using a form of words that suggests they might not is bloody stupid.

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emptyend 24th Sep '12 277 of 493
1

In reply to swanvesta, post #276

They have a responsibility to "respect" the park whatever they decide to do.

True. But I suspect that the subtext is that, in the event of finding something worth developing, then the Government will simply formally redefine the boundaries of the park - and continue to respect the upland gorilla habitats that are the principal concern of everyone.

That would simply be the pragmatic solution when faced with a potential development that could bring money and jobs to the (substantial but poor) local human population. In other words, the government would be looking for a win/win outcome in which the key habitats are protected and they can still take advantage of an opportunity (if one exists) to improve the lot of their people.

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loglorry 24th Sep '12 278 of 493
2

....or more likely the government would open up exploration/production so that they could cream off the profits, squirrel them away in Swiss bank accounts and spend them on buying arms to keep their population subjugated for as long as possible.

from "Human Rights Watch" http://www.hrw.org/drc had this to say about the elections in 2009.

"The human rights situation in the Democratic Republic of Congo remains grave. National elections were chaotic and marred by state security forces attacking opposition candidates, journalists and ordinary citizens. Incumbent President Joseph Kabila claimed victory, but election monitors said the results lacked credibility. Attempts to protest were brutally suppressed, and the main opposition candidate was put under nominal house arrest. In the east, the military and armed groups continue attacks on civilians, including rape and killings. A few perpetrators were prosecuted, but Bosco Ntaganda, an army general wanted by the International Criminal Court, remains free while his forces continue to commit atrocities."

There are always two sides to this and one can argue that without western investment the plight of the ordinary DRC citizen will never improve. However I've never been very comfortable with Soco operating in this region as there is no doubt that to succeed they would have to "cosy up" to President Denis Sassou-Nguesso a psudo elected dictator.

From an investment perspective it is also politically very difficult to make money when the chance of the assets being expropriated in such a politically difficult country is very real.

To be honest I don't attach much value to Soco's DRC adventure and hope they don't waste too much more on it.

Log


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WeeEck 24th Sep '12 279 of 493

We (the 1st world countries) have been trading profitably with the rulers of these countries for hundreds of years. First it was slaves, then ivory, and now it is natural resources. I am afraid that when money and profits are concerned morality gets thrown out of the window. I don't see that changing anytime soon. I can'y say I am comfortable with it but I can live with it. If anyone feels they can't then they should look for more ethical investments whatever they are these days.!

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djpreston 25th Sep '12 280 of 493
4

Seems as we (SIA) have had to stop activities in Congo:

from DJNW:

KAMPALA-Renewed fighting between Congolese rebels and government forces has forced U.K.-based wildcatter Soco International PLC (SIA.LN) to evacuate workers from its oil exploration camp in the country's restive eastern region to a site across the border, Ugandan police and the company said Tuesday.

Soco has started moving equipment and expatriate workers from areas around the Virunga National Park in North Kivu to the Ugandan border district of Kanungu, said Western Uganda police spokesman Elly Maate.

A Soco spokesman confirmed that the company has suspended its exploration work in Congo, but said the halt was "temporary" pending a final assessment of the situation. He said its main helicopter landing site has also been re-located to Uganda, from where Soco will continue to monitor events.

"SOCO is assessing the security status on a continual basis. The safety of SOCO's personnel is of paramount importance and, therefore, they'll only proceed when it is safe to do so," said SOCO Executive Vice President Roger Cagle.

The company's decision underscores a worsening security situation in North Kivu, where Congo's ill-equipped army is attempting to halt a rebel advance. The most recent fighting which erupted in April, after renegade former army General Bosco Ntaganda defected with hundreds of troops has already chocked mineral exports from North Kivu.

Soco operates an 800-square kilometer oil block in Eastern Congo, within the Lake Albertine Rift basin. Oil exploration companies have discovered more than 2 billion barrels of crude on the Ugandan side of Lake Albert and companies like Soco are hoping to make similar finds on the Congolese half of the basin.

According to Peter Lokeris, Uganda's junior energy minister, Uganda is bound by the 2007 agreement with Congo to cooperate with oil companies on the Congolese side of the border and "accord them the necessary assistance".

"The existing agreement provides that we cooperate in the exploitation and management of cross-border hydro carbons" Mr. Lokeris said.

While Uganda has made significant strides in its oil exploration activities in the basin, similar activities on the Congolese side continue to be impeded by insecurity.

Soco's other exploration projects in Africa are in the Congo Republic and Angola. The company also has an oil producing project in Vietnam, producing an average of 50,000 barrels of oil a day.

Last month, Soco said that it plans to spend up to $25 million buying oil assets in Africa.

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emptyend 25th Sep '12 281 of 493
1

In reply to djpreston, post #280

Yup - I was about to post a link, now that it has been picked up by Rigzone. I'm a bit surprised that they have a material ground presence TBH, given where the exploration programme stands at present.

Not good news for the local people either.

ps some background stuff here and here  - at least 1,000 locals have fled across the border too

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peterg 25th Sep '12 282 of 493
3

In reply to emptyend, post #281

Though the immediate impact on Soco's program in the DRC is probably limited (if not very limited), the clear demonstration that security in the area is an ongoing issue does have to be a concern, possibly a large one, for the future. Were things ever get to the stage of having a drilling program on the ground I would think that there would have to be pretty clear evidence of long term stabilisation before anything like that could be considered. So this must impact on the project, even if most would currently assign no value to it.

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emptyend 26th Sep '12 283 of 493
5

In reply to peterg, post #282

The security issue is the one that will dominate - though it is likely to remain quite fluid and capable of quite a bit of change over a few years. It is correct of course that there must be an impact on the project - though the recent stake acquisition suggests single-figure millions in terms of value at most.

However, I was interested yesterday to note (in the FT's pullout on Rwanda) that gas extraction appears to be going ahead on Lake Kivu, which is the next lake to the south (and closer to the gorilla habitat, incidentally). This suggests that there should be a resolution available to the environmental/Virunga concerns - and if the local populace (including the M23 guerillas) can be brought along then one can see the potential for some progress on a 5 year view. In fact, if you look at the descriptions of the Lake Kivu project (which deals with dissolved methane), you'll see that the environmental concerns would seem to be substantially more significant than would occur with any work around Lake Edward!

It is also worth noting that the UK Foreign Office have reportedly been telling SOCO what the company already knows and agrees with:

"We have informed Soco and urge the government of DR Congo to fully respect the international conventions to which it is signatory," a foreign office spokesperson said in a statement seen by Reuters.

"Foreign investments in sectors such as hydrocarbons ... can play a vital role in boosting development of the DRC ... Such investment needs to be done responsibly and sustainably, in compliance with local law and conforming to international standards," the statement said.

...but no doubt those less familiar with the situation will seek to read more into it.

Its the security issue that dominates.

......and of course none of this impacts at all on where the real value of the company lies. Africa could be written off in its entirety and the shares would still be worth much more than the current market value (as the upcoming reserves assessment will show).

ee

ps....misleading headline in Upstream - there is nothing in the UK Government's comments that justifies the headline that the Governemnt opposes SOCO's plans - especially given the quote in the body of the article.

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kenobi 3rd Oct '12 284 of 493
1

http://wwf.panda.org/wwf_news/?206343/WWF-calls-on-SOCO-to-get-out-of-Virunga-National-Park

I hope that there is a shed full of oil there, because the amount of stick that poor old soco has had for this area huge!

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emptyend 3rd Oct '12 285 of 493
5

In reply to kenobi, post #284

Thats the internet for you - one half-arsed story and it just keeps going round and round with little embellishments being added by do-gooders who blog before engaging their brains or finding out the facts.

It is disappointing that the WWF has been particularly prone to mendaciousness and, although they have finally noticed (it seems) that there is no actual threat to the gorillas, they still can't stop mentioning them and just can't resist having a cuddly baby gorilla photo in the top right and finishing off with an unjustifiable implied threat:

The areas of Virunga National Park allocated as oil concessions cover around 85 per cent of its land, and the habitats of endangered chimpanzees, hippos, and forest elephants. The park is also home to a quarter of the world’s critically endangered mountain gorillas, of which only 786 individuals remain. The gorillas are a major source of eco-tourism income in the region.

......and they completely omit the point that SOCO have repeatedly said that they are going nowhere near the mountain gorillas which, in any event, inhabit  the part of Virunga that lies outside the block.

I also note they say:

“Many people in the area have incomes and live thanks to the fish from Lake Edward and we fear that petrol will bring pollution and more conflict in our region,” said community leader Bantu Lukambo during a June protest against SOCO’s relentless push into the park.

Community activists opposing SOCO’s activities in Virunga National Park have reported receiving death threats; the company has denied any involvement.

Total hogwash, I'd think, given the lie about "relentless push"......

As you say though kenobi, I hope there is a load of oil there - not that we'll be around to see any of it.

ps...I'm cancelling my support for WWF


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emptyend 9th Jan '13 286 of 493
2

FWIW the rebels in East DRC are reported to have declared a ceasefire. Perhaps there will finally be a chance to do the aeromag survey on block V?

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kenobi 7th Mar '13 287 of 493
3

The times they are a changing ?

well perhaps the laws are ?

http://uk.reuters.com/article/2013/03/07/congo-democratic-oil-virunga-idUKL6N0BYDRJ20130307

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tournesol 7th Mar '13 288 of 493
3

In reply to kenobi, post #287

Sadly ill informed and misleading comment in that article. As reported by Attenborough, in his recent Africa series , Virunga has a large and well established human population and is one of the most intensively farmed regions in the whole of Africa. Basically the official boundaries of the Virunga National Park are much larger than the area which contains unspoiled forest and provides a home for the few surviving mountain gorillas. The problem here is that the park has been incorrectly mapped. Neither Soco nor anyone else should be allowed to disturb the gorillas. But drilling 30 miles away from the edge of their habitat does not pose any risk whatsoever. Solution is simple - just redraw the map and correctly define the perimeter of the zone that needs protecting.

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kenobi 7th Mar '13 289 of 493

I am sure you are right Tournesol, but it could be that it's easier to get round the laws this way, than to redraw the boundaries ? The important thing to shareholders is that they make progress and get some exploration done.
Sounds like it is early days , but that perhaps the wheels are moving.

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emptyend 18th Aug '13 290 of 493
3

ENI seem to have picked up a block in the Cuvette Basin and met with the President about their ongoing activities in DRC.

IIRC SOCO International (LON:SIA) also had hopes of a block in the same basin - though there has been no status update on that for well over a year AFAICR.

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rhomboid1 27th Aug '13 291 of 493
1

I see the Telegraph Business section front page has a picture of cuddly gorillas and a misleading hatchet job quote about Soco , I'd have hoped that they'd have at least sought some balance rather than taking the WWF line so uncritically.

Doesn't appear on the online issue as yet but I can feel a strongly worded letter coming on...

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tournesol 27th Aug '13 292 of 493
3

The Belfast Telegraph has a more balanced piece, but it is still a very one-sided and uncritical regurgitation of the WWF propaganda.

I'm wondering if it might be possible to use the advertising standards authority complaints procedure against the WWF ads which are clearly misleading and unfair? Anyone got any experience in this area?

T

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MadDutch 27th Aug '13 293 of 493
3

In reply to tournesol, post #292

tournesol, I say; Go for it!"

I have no doubt the WWF policy is advertising, or at the least is advertorial because it goes with their need for donations. Money collected is not given to the animals, it is used to pay their employees.

Until they know they cannot attack Soco with impunity, they will not stop because they think we are an easy target. I attack them for their incompetence in allowing 99% of the ugly hippo population to be killed, while concentrating on the beautiful apes. I point out they are the self appointed custodian of all the wildlife and have failed. I suggest a change of management is needed.

Good luck with the complaint.

MD

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