New Trend in Oil Rights - Future Contingencies

    • New Trend in Oil Rights - Future Contingencies

      Kilimanjaro strikes Cabinda deal

      05 February 2013 08:24 GMT
      .Angolan state oil giant Sonangol has a fight on its hands for control of a block after a Canadian junior penned another agreement with a territory agitating for independence.
      Calgary-based Kilimanjaro Capital said on Tuesday that it had struck the oil assignment agreement for onshore exploration with the Republic of Cabinda, a tiny territory ruled by Angola but with which it shares no land border.

      Privately-held Kilimanjaro said its deal was also struck with the Front for the Liberation of the Enclave of Cabinda (FLEC) and the ensuing licence “becomes fully active upon international recognition of the Republic of Cabinda”.

      The deal with Cabinda authorities, who operate in absentia from France and neighbouring Congo (also known as Congo-Brazzaville), puts Kilimanjaro at loggerheads with Sonangol as it claims to grant the Canadian future rights to the disputed Northeast Block over which the Angolan giant claims a concession.

      “Control of the countryside in the region has been contested between FLEC and the Angolan army for almost four decades,” Kilimanjaro said.

      “The Cabinda Northeast Block's hydrocarbon potential is currently unknown due to the proximity of FLEC's forward bases, dense vegetation and hilly terrain.”

      In November Kilimanjaro said it had struck a similar deal with Cabinda to gain rights to offshore blocks, including an unexplored ultra-deepwater block. Agip, Total, Chevron, Eni and Angola’s Sonangol all hold producing interests in the area, generating output of 700,000 barrels of crude oil per day.

      The disputed territory accounts for much of Angola's output and holds an estimated 60% of its proven oil reserves.

      Also known as Portuguese Congo, Cabinda separated from Lisbon in 1975 but was subsequently annexed by Angola, kick-starting a 38-year struggle between locals and Luanda.

      It hit the headlines most recently after a bus carrying the Togo international football team to the Africa Cup of Nations tournament in Angola was attacked by armed gunmen in January 2010. Three people, including the assistant coach and driver, were killed with others injured.

      Kilimanjaro has said it is pursuing a strategy of acquiring disputed and distressed assets throughout Africa, and plans to seek financial, oil and mineral industry partners for the new plays.

      It also recently signed an agreement for exclusive oil and minerals rights with the Government of Southern Cameroons, a would-be administration of former British mandate territory now part of the Republic of Cameroon that is pressuring for independent status as the Republic of Ambazonia.

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