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March 9th, 2011, 05:47 PM
Tullow heads for Congo exit
UK independentTullow Oil said today it was pulling out of the Democratic Republic of Congo and abandoning legal efforts to win back two oil blocks that it lost to two little-known companies last June.
The disputed Congo blocks are on the DR Congo side of Lake Albert. Tullow, led by chief executive Aidan Heavey, wanted to join them up with blocks it already holds on the Ugandan side.
Tullow paid $500,000 for rights to the blocks in 2006 and sought legal action after they were re-awarded by presidential decree last June to previously unheard of Caribbean-registered firms Caprikat Ltd and Foxwhelp Ltd.
"Given the expense of further proceedings and the difficulty in enforcing any award against the DRC even in the event of success, the board has regretfully taken the decision to discontinue the legal proceedings and withdraw from the DRC," the company said in a statement to the London Stock Exchange.
President Joseph Kabila's decision to sign over the rights to the blocks provoked widespread investor concern last year.
The two companies paid $6 million in signature bonuses for the blocks, according to documents seen by Reuters, which show that South African President Jacob Zuma's nephew Khulubuse Zuma has power of attorney over Caprikat, while his lawyer Michael Hulley has similar powers for Foxwhelp.
Published: 09 March 2011 15:21 GMT | Last updated: 09 March 2011 15:24 GMT
UK independentTullow Oil said today it was pulling out of the Democratic Republic of Congo and abandoning legal efforts to win back two oil blocks that it lost to two little-known companies last June.
The disputed Congo blocks are on the DR Congo side of Lake Albert. Tullow, led by chief executive Aidan Heavey, wanted to join them up with blocks it already holds on the Ugandan side.
Tullow paid $500,000 for rights to the blocks in 2006 and sought legal action after they were re-awarded by presidential decree last June to previously unheard of Caribbean-registered firms Caprikat Ltd and Foxwhelp Ltd.
"Given the expense of further proceedings and the difficulty in enforcing any award against the DRC even in the event of success, the board has regretfully taken the decision to discontinue the legal proceedings and withdraw from the DRC," the company said in a statement to the London Stock Exchange.
President Joseph Kabila's decision to sign over the rights to the blocks provoked widespread investor concern last year.
The two companies paid $6 million in signature bonuses for the blocks, according to documents seen by Reuters, which show that South African President Jacob Zuma's nephew Khulubuse Zuma has power of attorney over Caprikat, while his lawyer Michael Hulley has similar powers for Foxwhelp.
Published: 09 March 2011 15:21 GMT | Last updated: 09 March 2011 15:24 GMT