October 2, 2010 / 5:20 AM / 9 years ago

Tullow gets court injunction in Congo oil dispute

BUKAVU, Democratic Republic of Congo (Reuters) - Tullow Oil has obtained a court order aimed at stopping rivals from working on two Congo oil sites it says it has rights to develop, according to documents seen by Reuters.

An oil rig prepares to drill in western Uganda, near the shores of Lake Albert, June 15, 2007. REUTERS/Tim Cocks

The UK firm and the Congolese government have been in dispute since the Democratic Reupublic of Congo this year handed the promising Lake Albert blocks 1 and 2 to little-known overseas concerns Caprikat and Foxwhelp, dismissing an accord Tullow believed it had sealed with the government in 2006.

The injunction, was issued by the Eastern Caribbean Supreme Court on September 21 and requires British Virgin Islands-registered Caprikat and Foxwhelp not to exercise or transfer rights to the blocks or carry out work on the sites, according to the documents obtained by Reuters.

“If you fail to comply with the terms of this order proceedings may be commenced against you for contempt of court and you or any of your directors may be liable to be imprisoned or to have an order of sequestration made in respect of your property,” the injunction said.

The court has scheduled a new hearing on the case for October 18.

Officials from Congo’s government, Caprikat and Foxwhelp were not immediately available to comment on whether they would recognise the court’s order.

A spokesman for the two companies told Reuters in August that $9 million had already been spent on the blocks with a view to starting exploration this year.

In a letter dated September 28, also seen by Reuters, Tullow told oil minister Celestin Mbuyu the legal action came after repeated attempts to communicate with the government and company officials

“We have therefore obtained provisional injunctions that were pronounced against these two companies,” it said.

Tullow has also opened international arbitration proceedings under International Chamber of Commerce (ICC) rules against Congo in Paris aimed at ruling on the legal rights to the contested blocks.

The Lake Albert blocks border on Uganda’s oil-rich frontier and were signed over by President Jospeh Kabila to Caprikat and Foxwhelp in June. Tullow, which holds a concession on the Ugandan side of the lake, says its contract remains valid even though it was never signed by the president.

South African consortium Divine Inspiration Group also lost out when the blocks were awarded to the offshore companies and it is seeking compensation.

Congo is already subject to international arbitration proceedings initiated by Canadian company First Quantum in Paris and Washington, over claims that three mining projects have been expropriated.

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