Tullow Oil sues DRC for passing the rights on two oil blocks to the BVI companies

The UK oil producer Tullow Oil, which has been deprived of the right for two oil blocks in the Democratic Republic of Congo, in September won a temporary injunction in a British Virgin Islands court against the development or resale of these blocks, now belonging to the companies registered in the British Virgin Islands and owned by the relative of South African President.

Some months earlier, the BVI companies Caprikat Ltd. and Foxwhelp Ltd. received a presidential decree to exploit the blocks that were previously awarded, though not decreed, to Tullow Oil.

By words of  Tullow’s vice president, the company had no alternative to legal action after DRC canceled its claim to two oil blocks on Lake Albert. He said: “Since Tullow is not in the habit of buying back goods which have been stolen from us, I defy anybody to show what alternative we had to these legal actions.”

Before Caprikat and Foxwhelp won the rights to oil blocks 1 and 2, block 1 was awarded to South African-based Divine Inspiration Group Ltd., or DIG, in 2008, two years after Tullow signed for both blocks. But only Zuma’s companies received the presidential decree, the rights of Tullow and DIG were canceled in June 2010.

DIG wants to get $4 million in reimbursement plus interest, as well as a decree for three blocks for which the company already has a production-sharing agreement. The representatives of the Democratic Republic of Congo said that the contract process had followed Congolese law, by their words, they are not afraid of the risk of international arbitration.

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