Katrina's Feed
Dec 3, 2010

Tullow hopes Uganda can help get back Congo oil blocks

KINSHASA, Dec 3 (Reuters) – Britain’s Tullow Oil (TLW.L: Quote, Profile, Research) has enlisted Uganda’s help to win back two disputed Congo oil blocks it wants to develop with France’s Total (TOTF.PA: Quote, Profile, Research) and China’s CNOOC, according to a letter obtained by Reuters.

The Nov. 19 letter from Tullow Chief Executive Aidan Heavey, whose company is battling licence woes in both Congo and neighbouring Uganda, says it sought the advice of Uganda’s energy minister and is now confident it can get the blocks back.

The disputed Congo blocks, scheduled to be explored by other companies early in 2011, are on the Congo side of Lake Albert and Tullow has said it wants to join them up with blocks it already holds on the Ugandan side where it has agreed to partner with Total and CNOOC (0883.HK: Quote, Profile, Research).

“Now we are confident that with the assistance of (Uganda Energy Minister) Hon. Eng. Hilary Onek, this matter can at last be put to rest,” said the letter, adding Tullow is ready to consider dropping its legal challenges over the blocks.

“Tullow believes that it and its new partners in Uganda, Total and CNOOC, can play a very strong role in the exploration and exploitation of the whole of the Albertine Region.”

Tullow sought legal action after Blocks 1 and 2 of Congo’s eastern Albertine Graben were awarded by presidential decree in June to previously unheard of Caribbean-registered firms Caprikat Ltd and Foxwhelp Ltd.

Tullow paid $500,000 for rights to the blocks in 2006, but the deal was never ratified by the presidency.

Dec 1, 2010

Key political risks to watch in Congo

KINSHASA, Dec 1 (Reuters) – Democratic Republic of Congo is seeking political stability, battling economic woes and stubborn rebel insurgencies as it gears up for elections due next year.

The polls for the presidency and parliament, due to start in November 2011, will be the second since the official end to the 1998-2003 war, which drew in six foreign armies and resulted in the deaths of 5 million. Here are some factors to watch.

POLITICS

President Joseph Kabila came to power when his father was assassinated in 2001, winning presidential elections in 2006. But he still relies on the support of other parties such as PALU, a veteran opposition party, for a parliamentary majority.

Factions within the coalition have complained about Prime Minister Adolphe Muzito, from PALU, while opposition parties in parliament have repeatedly tried to topple the government.

Rather than pushing through steps towards decentralisation set out in the constitution, analysts say Kabila’s rule has seen a concentration of power and rising political oppression.

This perception was exacerbated in June when leading human rights activist Floribert Chebeya was found dead in mysterious circumstances, prompting the suspension and questioning of police chief John Numbi, previously considered a Kabila ally. A military trial of eight police officers, three of whom are on the run, is due in December. Numbi is called only as a witness.

Nov 29, 2010

Congo army behind instability, smuggling: U.N.

KINSHASA (Reuters) – Extensive criminal networks within Congo’s army are deliberately fostering insecurity to profit from illegal mining, smuggling and poaching, a report from United Nations experts said on Monday.

Insecurity in Congo’s east has continued despite the end of a 1998-2003 war, displacing more than 1.27 million people and spurred on by competition for natural resources that has had a “devastating impact on security,” according to the report.

The Group of Experts, a five-member team tasked by the U.N. to investigate sanctions violations, noted “pervasive insubordination” throughout Congo’s national FARDC army.

“Officers at different levels of FARDC hierarchy jostle for control over mineral-rich areas at the expense of civilian protection,” it said of criminal networks within the army.

Referring to the rape of over 300 people in the Walikale district in July and August, the report said the local militia blamed for the attack had been created by the army.

“The Group has concluded that Mai Mai Sheka is a creation of a criminal network within FARDC,” it said, noting that repeated lootings by the group were aimed at the district’s main mines.

The report is based on information from the U.N. and local groups, plus the team’s “first-hand, on-site observations,” or information corroborated with at least three independent sources assessed by the Group as credible and reliable.

Nov 26, 2010

UN urges Congo to ban oil drilling in gorilla park

KINSHASA (Reuters) – The United Nations’ cultural arm UNESCO has appealed to Congolese President Joseph Kabila to guarantee there will be no oil exploration in the forest home of rare gorillas where two UK-listed firms hold drilling rights.

SOCO International and Dominion Petroleum were awarded a presidential decree to Block 5 of east Congo’s Albertine Graben in June. Plans for a seismic survey include exploding dynamite, despite the fact that the rebel-heavy area overlaps with the protected Virunga National Park.

In a letter seen by Reuters, UNESCO chief Irina Bokova warned Kabila of “extremely damaging repercussions” of oil activity and asked him to ensure no exploration took place in the park, which is also home to chimpanzees, lions, elephants, and migratory birds so rare it has special wetland status.

“I call on you to guarantee that no oil exploration or production will be committed at the heart of the Virunga national park,” she said in the letter dated August 6, which noted past commitments by Congo to protect the World Heritage site.

Local environmentalists argue that any exploration would be contrary to Congo’s own laws.

“Congolese legislation does not authorize mineral and petrol production in national parks,” said a November 15 letter seen by Reuters to Environment Minister Jose Endundo from the Congolese Institute for the Conservation of Nature (ICCN).

It noted SOCO’s environmental impact assessment, required by law, made no reference to the park’s status as a protected zone.

Nov 25, 2010

Tullow loses Congo oil injunction – court document

KINSHASA, Nov 25 (Reuters) – London-listed Tullow Oil Plc (TLW.L: Quote, Profile, Research, Stock Buzz) lost an injunction to stop two offshore companies developing oil blocks to which it lost the rights in Democratic Republic of Congo, according to a court ruling seen by Reuters.

Tullow Oil was awarded rights to Blocks 1 and 2 of Congo’s Albertine Graben in 2006. It is pursuing legal action against Congo and two British Virgin Islands-registered companies to which President Joseph Kabila re-awarded the rights in June.

A court ruling seen by Reuters said Tullow’s prospects of regaining the blocks were “precarious” and refused to renew an interim injunction first granted in September to prevent the companies from developing the blocks.

“It is my view that the balance of convenience comes down firmly in favour of refusing to continue the interim injunction,” said Commercial Court Judge Edward Bannister in the Eastern Caribbean Supreme Court in the British Virgin Islands, where the two offshore firms — Caprikat Ltd and Foxwhelp Ltd – are registered.

“Crudely put … Tullow has no obvious prospects of ever reaching the position of being entitled to enjoy the fruits of its PSC (Partnership Sharing Contract), yet is determined that no other person shall be permitted to exploit the territory.”

In the judgment dated Nov. 19, Bannister said continuing the injunction would interfere with the expressed will of the head of a sovereign state.

DIVINE COMPENSATION

Nov 24, 2010

Congo copperlands boss prefers business to politics

LUBUMBASHI, Democratic Republic of Congo, Nov 24 (Reuters) - Moise Katumbi, one of Congo’s most powerful men and political leader of its richest province, is handling two black cowboy hats as he sits in his office in the country’s copper heartland.

“People say I am bullet-proof, even my hat, but feel this,” says the 45-year-old governor, a lean and muscled millionaire, of his sartorial trademark, fingering first a floppy leather hat and then a felt one.

“This is a fake story,” he says of the local yarn, a phrase he repeats often throughout four separate interviews in which he addressed accusations of graft, theft, tax evasion and undue influence on the nation’s massive mining sector.

The top politician in Katanga, home to 55 percent of the world’s cobalt production and five percent of copper, Katumbi’s political career took off when elected local deputy in 2006 with the highest score recorded in a Congolese parliamentary vote. He was appointed local governor a year later with an overwhelming 98 percent backing from the provincial assembly.

Yet Katumbi has got used to taking the flak, whether from political rivals or Congo’s business federation, whose members struggle with steep local taxes they say are levied illegally.

Regularly touted as a presidential contender — a dangerous destiny in Congo, where several past hopefuls have been toppled or killed — Katumbi admits politics has won him many enemies, even if he doesn’t actually sport body armour.

“People are saying ‘He’s getting money from the province, he’s stealing left and right, he’s not paying duty’,” said Katumbi, who says he no longer has a role in his family’s trucking and heavy machinery businesses and has sold former mining interests.

Nov 5, 2010

Hundreds abused during Angola expulsions, U.N. says

LUBUMBASHI, Democratic Republic of Congo (Reuters) – More than 650 people have suffered sexual violence during mass expulsions from Angola to Congo in the past two months, according to a U.N. agency report seen by Reuters.

The report by the U.N. Children’s Fund UNICEF said 6,621 people arrived in two territories of Luiza and Tshikapa/Kamonia, in Western Kasai province, in two waves during October.

“The conditions of expulsion are still terrible. In many cases, sexual violence is reported and even cases of torture,” said the report, citing 657 instances of sexual violence based on evidence collated by welcome committees in the two areas.

Separately, the U.N. Office for the Coordination of Humanitarian Affairs (OCHA) said doctors confirmed 35 other women had been raped, after examinations conducted in the Congolese town of Tembo near the Angolan border, adding that humanitarian workers believed the true figure was close to 100.

“We are not in a position to confirm in which country they (the rapes) happened, but we do call on the authorities of the two countries to investigate these accusations to find out whether the rapes took place and where,” said OCHA spokesman Maurizio Giuliano.

Neither Giuliano nor the UNICEF report mentioned who was behind the violence. Congolese Information Minister Lambert Mende said authorities had not received any such reports.

“We’re not informed. We don’t know, these figures are not confirmed,” he told Reuters by telephone.

Oct 30, 2010

S.Korea says seeking $1 bln Congo mining deal

LUBUMBASHI, Democratic Republic of Congo, Oct 30 (Reuters) - A consortium of South Korean companies will seek a minerals-for-infrastructure deal in Democratic Republic of Congo that could be worth $1 billion, Congolese and South Korean officials told Reuters late on Friday.

The proposed deal — involving refurbishment of a copper mine and construction of an Atlantic deepwater port — would bolster South Korea’s bid to secure long-term access to metals while speeding Congo’s development, South Korean ambassador to Congo Kim Sung-chul said.

“We were more poor than Congo in the 1960s, now we are chairing the G20. This change was possible only thanks to support from outside and we think it’s high time we repay that,” he said.

Kim is leading a delegation of executives from South Korean firms Samsung (005930.KS: Quote, Profile, Research, Stock Buzz), Hyundai (005380.KS: Quote, Profile, Research, Stock Buzz), Bosco, Daewoo, and Taejoo Synthesis Steel to Congo mining sites.

He said a consortium of South Korean companies, including Taejoo, was seeking to form a joint-venture with Congo’s state-owned miner Sodimco to refurbish the disused Musoshi copper mine at a cost of $300 million.

He said the deal would also involve South Korea’s Eximbank loaning $150-$200 million to South Korean firms to fund a wastewater treatment plant in Kinshasa to serve 2 million people – the cost of which would be recouped from future revenues from the mine.

DEEP-SEA PORT

Oct 29, 2010

No end in sight to Congo’s violence

KITCHANGA, Democratic Republic of Congo, Oct 29 (Reuters) - Each day Joyce goes out into the bush and assembles five tiny bundles of wood for sale, only to have one taken from her by former rebels now in the ranks of the national army.

“I have to submit as I don’t want to be raped,” she said, her baby wrapped to her back in a camp for thousands of displaced people in Kitchanga in Congo’s troubled east.

Congo’s 1998-2003 conflict was known as Africa’s World War, in which more than 5 million people are estimated to have died from violence, hunger and disease.

Joyce is just one of over 1.27 million in Congo’s east unable to return home due to violence that continues despite the presence of the world’s largest U.N. peace force and a March 2009 deal meant to bring peace to this central African country.

“Attacks against civilians increased … Human rights violations were also perpetrated by elements of the security forces,” United Nations Secretary General Ban Ki-moon told the Security Council in a report this month.

The causes of Congo’s insecurity are legion. Analysts blame poverty, the failure of President Joseph Kabila to impose the rule of law, the poorly organised army, myriad rebel groups and the constant battle for resources including everything from charcoal and grazing land to tin ore and gold.

Even a ban on mining in Congo’s east, which exports gold and minerals including 5 percent of the world’s tin, has failed to bring security or stop smuggling, including by the army, according to mines minister Martin Kabwelulu.

Oct 26, 2010

Congo says wins right to sell First Quantum assets

KINSHASA, Oct 26 (Reuters) – An international court rejected a bid by miner First Quantum Minerals (FM.TO: Quote, Profile, Research, Stock Buzz) to fully protect its disputed Congolese assets, the company said, a move Congo said gave it the right to proceed with their sale.

First Quantum said it had failed to secure complete court protection for its $750 million investment in a copper tailings project in Congo while it seeks to defend it, but no ruling had yet been given and the case is not due to be heard until 2012.

“We sought a series of measures to protect the asset and not all of these have been granted and that is not a surprise,” a spokesman for First Quantum said on Tuesday.

“The tribunal has not made a ruling on the merits of the arbitration. In fact, the hearing of the arbitration is not scheduled until 2012,” the spokesman added.

The Paris-based International Court of Arbitration (ICA) said it could not comment on the case.

Court documents obtained by Reuters dated Oct. 26, however, said First Quantum’s requests — to block Congo and state mining company Gecamines from selling or transferring the assets until arbitration is concluded — were rejected because they were “too large” and “unspecific.”

First Quantum has already lost two other concessions, and the battle over rights to the Kolwezi project, now partly owned by Kazakh-based mining group ENRC (ENRC.L: Quote, Profile, Research, Stock Buzz), has dented investor confidence in the country.