Why Total is packing its bags and how Dig Oil is taking over the reins
To everyone's surprise, Total finally decided to return its only block in Congo-K. While the French major Total tried to seize blocks 1 and 2 in eastern Congo-K, she took a step back by returning the 3.

A surprising decision

For two years, Total had been requesting and easily obtaining extensions of its first exploration period in order to drill on its Block 3, which it had been operating since 2010 (AEI No. 812). However, these largesse from the Congolese Ministry of Hydrocarbons were not enough to convince the tanker to stay in the country. While discussions should have begun with the Congolese authorities at the beginning of 2019, i.e. before the expiry of the second extension, Total, still unable to drill a well in this area in the east of the country, finally decided to return its shares in the block. No meetings were reportedly held to explain this decision. Only one letter was sent to the Ministry of Hydrocarbons at the end of February. This method particularly irritated the minister in charge of this portfolio at the time, John Kwet Mwan Kwet (also responsible for cooperation). Having obtained a six-month extension until August, Total's partners on Block 3, Dig Oil and Efora Energy, have already started looking for a new operator.

The Dig Oil game

Led by South African Andréa Brown, Dig Oil is also in the process of negotiating the judgment of the Paris Chamber of Commerce (CCI), which in 2018 ordered Congo-K to pay several hundred million euros in compensation due to the absence of a presidential decree on the blocks in the central basin. However, it had signed production sharing contracts on Blocks 8, 22 and 23, which were finally awarded to it at the end of 2018, in the hope of avoiding the payment of arbitration damages (AEI n°833).

Dig Oil has begun to negotiate with some of the department's executives. In order to find a way to enforce the decision of the Paris arbitration. Congo-K will probably never have the means to honour the hundreds of millions of dollars to the oil group, and the latter has understood that it was thus in a strong position to request participation in other blocks, such as 1, in the hands of Caprikat and Foxwhelp - held by Dan Gertler. Dig Oil had also signed a production sharing contract in 2007 on Block 1 but had never finally obtained a presidential decree from this block located on the other side of Lake Albert where, on the Ugandan side, more than 1.5 billion recoverable barrels were discovered. Dig Oil wants its role on this permit to be part of the negotiation with the Ministry of Hydrocarbons. In the event of obtaining a participation on the 1, the firm could then itself cash a part of this asset with a large majority.


Source Africa Energy Intelligence

YOUR REACTION?

Facebook Conversations



Disqus Conversations