The "Financial Times" reports that the government of the Democratic Republic of Congo (Congo, Kinshasa) has threatened to take away two prospective oil blocks awarded to start-up offshore companies, linked to an Israeli businessman with a significant presence in the country, if they do not speed up their development.
The businessman in question is Dan Gertler, who, has extensive mining interests in Africa, especially in the Congo. Beny Steinmetz is another Israeli businessman with extensive African mining interests. The two oil blocks are in eastern Congo, in the Lake Albert area in the Rift Valley, near the Ugandan border.
According to the "Financial Times", "The highly sought-after blocks were awarded in 2010 to two offshore companies with no track record in the energy sector, Caprikat and Foxwhelp. The UK’s Tullow Oil plc (LSE: TLW) claimed at the time the award was a “smash and grab”. The pair had been incorporated in the British Virgin Islands only months earlier, while both Tullow and another company had already been given contracts for the blocks which were the subject of dispute."
"Bloomberg" adds that Caprikat Ltd. and Foxwhelp Ltd. are both owned by South African President Jacob Zuma’s nephew Khulubuse Zuma.
The "Financial Times", quotes Congo's incoming Oil Minister Crispin Atama Tabe Mogodi as saying that Gertler is a principal partner in both companies. The paper describes Gertler, a grandson of the founder of Israel's Diamond Exchange, as a "businessman who has built a reputation as one of Congo’s most prominent deal makers," and after making made his reputation in diamonds in Angola, over the past 15 years, he has become known as the go-to man to fix deals in Congo in everything from copper to oil.
Mogodi told the "Financial Times", “We don’t have any more time to lose and activities must be sped up,” adding that Congo’s oil industry lags behind neighbors Uganda and Republic of Congo. “If [the government of Democratic Republic of] Congo decides they can’t do it, we will take back the contract. It’s possible. It’s our contract."
The "Financial Times" says, "Although Caprikat and Foxwhelp have met oil majors including France’s Total and China’s CNOOC, company executives say they have not yet struck a deal. Some oil company sources argue the blocks have become so “toxic” they cannot sell them on. These claims are denied by the operator."
The "Financial Times" was unable to contact Gertler on Friday, because of the Sabbath, but says that an associate, Oren Lubow, an oil and energy executive based in Israel, has met major oil companies on behalf of Caprikat and Foxwhelp to discuss investment, flying to Europe for meetings with French oil major Total and others.
The "Financial Times" quotes blocks operator Oil of DR Congo CEO Giuseppe Ciccarelli as saying, "There is no reason why the government should take some punitive action against Caprikat and Foxwhelp because we have satisfied and exceeded many of our obligations”. He added that the company has spent $50 million on 2D seismic surveys over the past two years and that the company may conduct 3D seismic survey and are to drill two exploratory wells, at an additional cost of $50 million.
Published by Globes [online], Israel business news - www.globes-online.com - on June 25, 2012
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