South Africans milk DRC oil

2010-06-26 10:09

A number of South Africans have

managed to gain access to rich, emerging oil

fields in the Democratic Republic of Congo (DRC) –

courtesy of their political ties.

Khulubuse Zuma, controversial businessman and nephew of President

Jacob Zuma, was this week ­unexpectedly granted access to oil concessions in Lake Albert.

The DRC awarded Blocks 1 and 2 in

Lake Albert to Caprikat and Foxwhelp, registered in the British Virgin Islands

and owned by Zuma, according to a presidential decree published in Congo’s

Journal Officiel this week. The journal is the Congolese government’s


Two companies will in 2012 ­begin exploring two oil blocks in eastern DRC

that were previously contracted to Tullow Oil, a

company adviser said.

Zuma is also chairperson of ­Aurora Empowerment Systems, which is

in the process of buying two gold mines from Pamodzi Gold. The sale of these

mines has courted controversy as Aurora has struggled to pay its


Trade union Solidarity spokesperson Gideon du Plessis said on

Friday that workers at Grootvlei, one of the two mines, had not received their

salaries since the end of February. “They can’t claim unemployment insurance as

they are still on Aurora’s payroll.”

Du Plessis said that of the union’s 300 members at Grootvlei, 100

members will still be at work: “If these 100 workers stop working because of

non-payment, the mine will be flooded completely and there would also be an

ecological disaster as 108 megalitres of water flows into nearby areas.”

Until last week the DRC awards were

only provisional, but President Joseph Kabila has now confirmed them.

SacOil, a Pan African-controlled oil

and gas-focused company with exploration assets in Africa, has welcomed the

news, while saying it still wished to liaise with the DRC government about its supposed rights to Block 1,

which now ­belongs to Zuma.

But in a recent report the British watchdog group in the oil industry, Platform, highlighted various

­irregularities in awarding the Lake Albert blocks.

How much oil can be extracted is

still uncertain, but speculation has it that the DRC’s existing small-scale oil production could increase fivefold to 150 000

barrels a day. In 2008 an evaluation of SacOil’s Block 3 produced an extremely

conservative valuation of R1.8 billion at an oil

price of $60 (about R460) a barrel.

Both small and large international oil groups like Total and the Chinese state-controlled

oil company, CNOOC, have been trying to gain

control of this oilfield in recent years.

Zuma’s companies have already entered into a partnership with the

Swiss consultancy Medea ­Development.

Earlier this year French oil giant

Total, among others, expressed ­interest in entering into partnership with

Tullow to develop the oil blocks that Zuma now


Caprikat was incorporated on March 24, according to registration

documents from the British Virgin Islands.

“Without transparency and the sanctity of contracts it is very

difficult to attract legitimate investment that will benefit the general

population rather than the few,” Tullow said. “We are reviewing our options but

have no doubt about the legal validity of our claims to these blocks.”

The DRC on June 18 also issued two

other presidential decrees awarding Soco International and Dominion Petroleum

Block 5 along Lake Edward and SacOil Holding of South Africa Block 3, according to Journal Officiel.

Divine Inspiration Group co-founded SacOil with businessman Tiego

Moseneke’s Encha Group in 2008. Moseneke is the brother of South Africa’s Deputy Chief Justice Dikgang Moseneke.

Additional ­reporting by


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