Democratic Republic of Congo has stripped British energy firm Tullow of its rights to two oil blocks on Lake Albert, thought to hold vast crude deposits, according to leaked documents yesterday.
Presidential decrees awarded little-known energy firms Caprikat and Foxwhelp, both registered in the British Virgin Islands, development rights to Block 1 and Block 2 on the lake, which straddles the Congo-Uganda frontier.
The blocks had previously been awarded to Tullow in a 2006 deal in which the company paid a $500,000 (£334,528) signing bonus, and South Africa’s Divine Inspiration Group also claims rights to Block 1 after a 2008 deal in which it paid $2.5m.
“The award of these licences to an unknown British Virgin Islands registered company does nothing to help Africa build any sort of reputation for transparency,” Tullow said.
Tullow added: “We are reviewing our options but have no doubt about the legal validity of our claims to these blocks.”
Tullow holds a development deal on the Ugandan side of Lake Albert – a body of water covering the Albertine Graben geological formation that experts say holds 2bn barrels of crude oil – and had been hoping to join them with the Congolese blocks.
Congo’s director of projects at the Ministry of Mines confirmed the awards to Caprikat and Foxwhelp. “It’s true, exactly,” he said.
The Ministry of Mines is understood to be seeking a $6m signature bonus from the two companies for the awards.
Tullow shares closed 4.1 per cent at 1,088p.
City A.M. Reporter