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Tullow wins back Congo oil rights

By Independent Team & Agencies

AS expected, Tullow Oil and its partner Heritage Oil have won back rights to explore for oil in the Democratic Republic of Congo after a year-long dispute, the country’s hydrocarbons minister, Rene Isekemanga Nkeka, has said.

Congo’s previous hydrocarbons minister, Lambert Mende, in February 2008, said Tullow’s rights to Block I on Lake Albert, which straddles the border with Uganda, had been withdrawn after he identified contract irregularities.

“This affair will be settled for good and will belong to the past,” Isekemanga said yesterday in an interview in Brazzaville, the capital of Congo Republic.

“The government will pronounce itself in the next days and production will begin.”

DR Congo’s President Joseph Kabila and his Ugandan counterpart Yoweri Museveni on March 4 agreed to accelerate the planned joint exploration of oil in the region, according to Kabila’s roving ambassador Seraphin N’Gwej.

Tullow and Heritage have made oil discoveries on the Ugandan side of the lake. The Buffalo-Giraffe oilfield is the largest onshore oil deposit discovered in sub-Saharan Africa in more than 20 years, Heritage Oil finance chief Paul Atherton said in January.

Tullow has said it may allow an additional partner into an exploration deal in the Democratic Republic of Congo following a government request.

The company may also “substantially” increase the signing bonus to secure the rights to explore in Lake Albert, Tim O’Hanlon, Tullow’s vice president for African business, said in an interview in the Congolese capital, Kinshasa.

“With three capable partners already involved, including the DRC national oil company, we see no need to further complicate matters,” O’Hanlon said. “However, if the government truly wants to see another partner in the venture, Tullow is ready to let someone in.”

The companies envisage a coordinated operation for the Lake Albert, which would require a $2 billion pipeline to pump the oil 800 miles (1,287 kilometers) to the Indian Ocean coast, where it would be shipped to the international market.

Any additional partner brought on board would have to be vetted by Tullow “in the most transparent way to ensure it’s the right partner and to avoid having speculators involved,” O’Hanlon said.

Tullow’s yearlong dispute with the government left Congo lagging behind Uganda in terms of developing its reserves, Isekemanga said.

Coffee exports to drop

Uganda, Africa’s biggest producer of robusta coffee, has cut its 2008-2009 forecast for exports of the beans by 5.7 percent after a drought cut yields. Shipments in the 12 months through September 30 may drop to 3.3 million 60-kilogram (132-pound) bags, compared with a September 23 forecast of 3.5 million bags, according to a report on Bloomberg News.

The revised figure is 2.8 percent higher than the 3.21 million bags exported last season.

The forecast has been revised downwards to 3.3 million bags because of drought, which affected anticipated yields.

Uganda experienced a dry spell in the first three months of this year, which affected the secondary crop in the main producing central and eastern regions, as well as the main crop in the southern and southwestern regions.

Exports from October 1 through March 31 rose 3.3 percent to 1.66 million bags, according to a tally by Bloomberg News. The country exported 256,579 bags last month, the agency said.

 

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