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Soco’s Congo Oil Search Faces Environmental Concerns

(Corrects spelling of minister’s name in second paragraph.)

Soco International Plc, a U.K. oil company, may be forced to delay its search for crude in eastern Democratic Republic of Congo because of disagreements over the scope of the country’s environmental laws, the government said.

Exploration at Soco’s Block 5 along the border with Uganda may contravene Congolese law because it overlaps with Virunga National Park, Environment Minister Jose Endundo said in an interview on Feb. 15 in Kinshasa, the capital. The United Nations Educational, Scientific and Cultural Organization, known as Unesco, designated Virunga a World Heritage Site in 1979.

“I want to meet with Soco and talk to them,” Endundo said. “We are open to listening to the different sides and I also want to stay within the law.”

Soco signed an agreement for the block in 2007 and a presidential decree authorized the company to begin exploration in June with Bermuda-based Dominion Petroleum Ltd. In August, Unesco asked Congolese President Joseph Kabila to guarantee that there would be no exploration or exploitation in Virunga because of its protected status.

The World Heritage designation shouldn’t stop Congo from exploiting the economic potential of its oil, Oil Minister Celestin Mbuyu said in an interview on Feb. 14.

“We want to respect our agreements, but we don’t want to be blocked from knowing what’s under our soil,” he said. “We might say to the world: ‘We’ll let that stay in the ground, but we want compensation.’”

Gorillas, Hippos

Virunga covers about 800,000 hectares (1.98 million acres) and is home to more than 20,000 hippopotamuses and endangered mountain gorillas. Since the mid-1990s, rebel groups and refugees have moved into parts of the reserve, clearing forest and killing wild animals.

Soco’s oil block doesn’t include the gorilla area and exploration will be confined to locations around Lake Edward, not the forests situated mostly outside the block, Deputy Chief Executive Officer Roger Cagle said in an e-mail on Feb. 16. Soco is completing its environmental assessment study and is capable of exploring for oil with minimal impact on Virunga, he said.

“We will proceed in a manner that’s conducive to the welfare of the park,” Cagle said. “When we leave it will be better than when we got there.” The company still wants to begin exploration in the first quarter of this year, he said.

The Lake Edward area that Soco is interested in is “sensitive” and Congolese law outlawing exploration in the park is clear, according to Emmanuel de Merode, director of Virunga Park.

‘Change the Law’

“There’s a way around it, which is to change the law,” De Merode said by phone yesterday.

Congo is recovering from more than 40 years of dictatorship and war that destroyed its economy and infrastructure. A UN Development Programme report released in November ranked Congo as the second-least-developed nation in the world out of 169 countries surveyed. The Soco project may offer employment and development opportunities for the region if it is allowed to proceed, Cagle said.

“It is our understanding that per the national law governing park regions that it is within the government’s rights to grant activities within any national park,” he said. “But, ultimately, it is the government’s decision and we will abide by that decision.”

The company is already exploring a second block, Nganzi, in western Congo.

To contact the reporter on this story: Michael Kavanagh in Kinshasa on mkavanagh9@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net.

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