Congo to invite Tullow back to disputed oil block
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Congo to invite Tullow back to disputed oil block UPDATED 25 Mar 2009 | 06:19  
Congo to invite Tullow back to disputed oil block

By Joe Bavier

KINSHASA (Reuters) - Democratic Republic of Congo plans to grant Ireland's Tullow Oil a stake in two oil blocks on Lake Albert, after revoking its claim to one of them last year, the oil minister said on Tuesday.

Tullow signed a production sharing agreement with the government in July 2006 for a 48.5 percent operating interest in Blocks 1 and 2 on the Congolese side of the Lake Albert Basin, which sits in northwest Congo, on the border with Uganda.

However, before Tullow could secure a presidential decree confirming the concessions, Congo's then Oil Minister Lambert Mende revoked the deal on Block 1 and awarded it to a rival consortium.

Moves to reinstate Tullow's claim to the oil blocks reflect an increased impetus to bring Congo's oil reserves into production following an easing of tensions with Uganda.

Rene Isekemanga Nkeka, who replaced Mende in a government reshuffle in October, told Reuters in an interview that a final decision on the blocks is due to be taken in the coming days, but that Tullow would now share them with other operators.

"They will certainly be there ... They will be an operator on both blocks," Isekemanga Nkeka said.

"On both of the blocks they will work with other operators. The government doesn't want a monopoly system."

Tullow and partner Heritage Oil have already begun drilling on adjacent blocks on the Ugandan side of Lake Albert. Earlier this month, they said exploration to date had shown resources of at least 600 million barrels, enough to support the building of a pipeline across Kenya to the Indian Ocean.

However, progress on the Congolese blocks has been hindered by years of instability with roots in a 1998-2003 war.

RAPPROCHEMENT

Kinshasa and Kampala's relationship has long been strained by clashes over resources. Uganda sent its army into Congo during the wars of the 1990s under the pretext of hunting down rebels but was later accused of exploiting Congo's resources.

Relations have improved recently. The two neighbours are in the process of reestablishing full diplomatic ties and hold regular high-level meetings over their common petroleum resources.

The dispute over which companies would exploit the blocks further delayed exploration on the Congolese side of the lake.

Following last year's decision to revoke Tullow's rights to Block 1, Congo's Parliament opened an inquest into how concessions were allotted and heavily criticised Mende and the oil ministry.

Isekemanga Nkeka said he was brought in to bring order to the former Belgian colony's chaotic oil sector and will seek capable partners able to help Congo enter production on Lake Albert by the time the pipeline is complete.

"I'm someone who is there to correct things, or try to correct things at least, to be fair to everyone ... These operators that will operate with Tullow will have a good technical foundation and a good financial foundation," he said.

With its narrow Atlantic coastline sandwiched between oil producers Angola and Republic of Congo, cash-strapped Democratic Republic of Congo exports just 25,000 barrels of crude oil daily from onshore wells in the country's west.

In addition to Lake Albert's proven reserves, Brazil's High Resolution Technology and Petroleum is surveying the Cuvette Centrale Basin, which it says could hold one of Africa's last giant to supergiant light oil, condensate and gas accumulations.

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