Congo (former Zaire) threatens to cancel Tullow PSC

Congo (former Zaire) has threatened to cancel Tullow Oil PLC's production-sharing contract for two blocks in Lake Albert on the Ugandan border because it claims it has not received a signature bonus.

Uchenna Izundu
International Editor

LONDON, Aug. 21 -- Congo (former Zaire) has threatened to cancel Tullow Oil PLC's production-sharing contract for two blocks in Lake Albert on the Ugandan border because it claims it has not received a signature bonus.

The two blocks, 1 and 2, were awarded in one package in July 2006. Tullow has paid a signature bonus for both, but the ministry is pressing for a second, separate payment.

Tullow was awarded a 48.5% operated interest in Blocks 1 and 2 in the prospective Albertine Graben.

According to media reports, Congo's hydrocarbons minister Lambert Mende is also unhappy that "international standards" for the tenders were not followed and is keen to start fresh negotiations on the second block.

A Tullow spokesman told OGJ that there is no legal basis to revoke the contract and it is working closely with the ministry to resolve any issues.

Tullow and Canadian partner Heritage Oil Corp. are awaiting a decree from Congo's President Joseph Kabila to start their work program which will involve shooting 400 km of 2D seismic and possibly drilling the first well in 2009.

Contact Uchenna Izundu at uchennai@pennwell.com.

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