DJNW reporting that finally Presidential decrees have been issued.
Good news and bad news.
Soco and Dominion have their blocks confirmed
Blocks 1 and 2 are stripped from Tullow and Heritage and given to Caprikat
DJNW:
The decree, which was supplied to Dow Jones Newswires by non-governmental website "www.leganet.cd", was signed Friday by President Joseph Kabila but published in the gazette dated Tuesday.
I had never heard of Caprikat (registered in BVI). A quick Google proved interesting, especially:
http://www.csmonitor.com/World/Africa/Africa-Monitor/2010/0622/An-Israeli-tycoon-the-Virgin-Islands-and-Africa-s-blood-diamonds
Caprikat reportedly an oil vehicle for an Israeli diamond tycoon who, the article suggests, may also have interests in copper and cobalt.
Well, Gertler certainly has "form" in DRC. See, for example: http://www.growthcompany.co.uk/news/280661/camec-plans-new-congo-deal.thtml
This natural resources world is certainly a small one, with Nikanor's then CEO, Jonathan Leslie, recently being appointed as CEO of Extract Resources.
Mark
Surely won't be RNS'd until it has actually appeared in the government gazette "Journal Officiel de la République Démocratique du Congo". This publishes next week I think.
Blocks 1&2 will get folks excited if reports are true! ;-)
ee
I have to say that while the news is apparently positive, for Soco, I find the fact that Tullow's blocks have been offered to companies such as Divine Inspiration and Caprikat gives me little confidence in operations in the DRC.
More comment:
Tullow, along with partners Heritage Oil Plc (HOIL.LN) and Cohydro, had been awarded the licences by the government in 2006 but they were still awaiting ratification by President Kabila.
A Tullow spokesman said: "We are reviewing our options but have no doubt about the legal validity of our claims to these blocks."
Heritage couldn't immediately comment and Cohydro couldn't be reached.
Hi Peter
I find the fact that Tullow's blocks have been offered to companies such as Divine Inspiration and Caprikat gives me little confidence in operations in the DRC
Now that SIA have the blocks (assuming we will get an RNS to confirm it). Thats a big bonus.
Its not exactly the first time that someone in the region has thought that they had a deal but had blocks taken away - cant remember the protagonists last time though.
What it does do is illustrate perfectly the need for very very good relations on the ground, somethign I think RdS has emphasised many times before (in Soco's case). Also something underlined by another oil exec I was speaking to the other day (a private co).
I find the fact that Tullow's blocks have been offered to companies such as Divine Inspiration and Caprikat gives me little confidence in operations in the DRC
Better be somewhere politically safe, such as offshore USA, without an unstable African ruler, ;-).
I guess these west African blocks are the first fruit of the Torobex buy in ten years ago?.
I have to say that while the news is apparently positive, for Soco, I find the fact that Tullow's blocks have been offered to companies such as Divine Inspiration and Caprikat gives me little confidence in operations in the DRC.
Peter,
I think the absolutely key point to note here is that they were never "Tullow's blocks" because their award was never ratified. This is why SOCO never say much about any blocks they have an interest in until formal ratification has taken place! Tullow may of course have grounds for complaint - but these things are never over until the fat lady has sung (or, in this case, you have full legal confirmation of the President's signature)
ee
I accept all of that, EE. However, they clearly were nearly Tullow's blocks, and the messing around in itself is a bit worrying., When you combine that with the fact that the groups who have been, and are being, looked at as replacements are companies with little or no apparent relevant background but some fairly "interesting" personnel involved and you have to start asking yourself just how is business being conducted, and whether that could have ramifications for anyone else operating in the DRC further down the line. If you were a serious oil ministry would you rather have Tullow or DI or Caprikat operating in your territory? And while I've no doubt the terms were better, you have to ask, who for?
It's a general point. Clearly the ratification is good news, and as DJ says, SOCO has worked hard at relationships so hopefully all will be well, but I can't escape a bad taste in my mouth - which has little to do with my TLW holding!
However, they clearly were nearly Tullow's blocks, and the messing around in itself is a bit worrying.,
I hate to be picky - but they cannot "nearly" be Tullow's blocks! If a block isn't ratified in DRC then that is IT!
On that basis they were doubtless "nearly" other companies' blocks too!
When you combine that with the fact that the groups who have been, and are being, looked at as replacements are companies with little or no apparent relevant background but some fairly "interesting" personnel involved and you have to start asking yourself just how is business being conducted, and whether that could have ramifications for anyone else operating in the DRC further down the line. If you were a serious oil ministry would you rather have Tullow or DI or Caprikat operating in your territory? And while I've no doubt the terms were better, you have to ask, who for?
I would certainly not rush to judgement on exactly who is "behind" these companies on the basis of what has been published so far. Indeed I notice that another company called "Foxwhelp Limited" also has a stake, along with Caprikat. I am expecting to see some more familiar names with oil interests connected with these blocks in the near future........!
It's a general point. Clearly the ratification is good news, and as DJ says, SOCO has worked hard at relationships so hopefully all will be well, but I can't escape a bad taste in my mouth - which has little to do with my TLW holding
The general point is that deals are ALWAYS done - and that the process is never, or virtually never, straightforward. I am in no doubt that this is why SOCO hired an experienced diplomat as a non-exec last year!
ee
!
Further comments from the TLW spokeman (from DJNW):
"This is a sad day" for Congo, he said. "The award of these licences to unknown British Virgin Islands-registered companies does nothing to help Africa build any sort of reputation for transparency."
"The last few weeks have shown the world the effect on the environment of an oil industry-related accident so to award exploration licences in a very sensitive environmental area to a company with no oil and gas experience is absurd," the spokesman said. "Furthermore, no legitimate company will farm in to blocks with unknown BVI companies so I fail to see how these blocks are going to be developed for the benefit of the people" of Congo, he said.
I am expecting to see some more familiar names with oil interests connected with these blocks in the near future
It has to be said that there is no sign of this so far!
Press reports now have it that both companies are owned by South African outfit Aurora Empowerment systems.
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http://www.guardian.co.uk/business/marketforceslive/2010/jun/24/tullowoil
A statement said Caprikat and Foxwhelp were owned by businessman Khulubuse Zuma (a member of the South African president's family) and partnered with oil and gas project development and consultancy company Medea based in South Africa and Europe.
Zuma said:
The contract should be viewed in the context of a developing strategic alliance between DRC and South Africa and is an important first step in the establishment of a wider industrial partnership between the two Countries in the oil and gas sector.
