KINSHASA, Democratic Republic of Congo, March 24, 2014 /PRNewswire/ --
- Fleurette supports efforts by DRC Government to improve the regulatory regime for hydrocarbons development
- Fleurette believes there should be an open tender process for the allocation of oil rights in the DRC
The Fleurette Group (Fleurette) welcomes the changes being made by the Government of the Democratic Republic of Congo (DRC) and the Minister for Hydrocarbons Mr Crispin Atama Tabe Mogodi, as it seeks to put in place a new regulatory framework for its still nascent hydrocarbons industry.
Fleurette believes it is essential that the Government of the DRC succeeds in building a successful regulatory framework which encourages both the investment the country needs and the entrance of global majors, while ensuring strong environmental controls and enabling the people of the DRC to derive maximum benefit from its natural resources.
Fleurette also believes that some adjustments to the proposed law should be considered by the Government of the DRC and the Minister for Hydrocarbons. Fleurette is confident these suggested adjustments will result in more investment into the sector and better returns for the Government and people of the DRC.
Open Tender Process
Fleurette believes any Tender Process should be based on a competitive bidding system and that any tender must be public with transparent and clear pre-qualification and evaluation criteria. By introducing an open tender process, as has been successfully done in other emerging economies, this increases the opportunity for the Government of the DRC to achieve better terms for the allocation of the Hydrocarbon Rights, such as minimum work programs and expenditures obligations, signature bonuses, royalties, CSR programs, and taxes on oil revenues (if applicable) for example.
Fleurette also believes that the ultimate beneficial owners of all hydrocarbons rights should be disclosed. It is clear that transparency is vital to give international investment community confidence in the regulatory environment. Fleurette notes that in the past the ultimate beneficial ownership of investments in the hydrocarbons sector has not been fully transparent and will support the government to bring in a regime where disclosure of beneficial ownership is compulsory.
Petroleum Rights - encouraging investment
The current draft of the proposed law differentiates between Prospection, Exploration and Exploitation Rights. The Prospection phase, granted on non-exclusivity basis, will not be able to attract investment since no guarantee is given to the investor that its Prospecting license can be converted into Exploration license through a full Production Share Contract (PSC). Fleurette believes the Rights to explore and exploit the Hydrocarbons on a specific block should be assigned on an exclusive basis through a PSC and open Tender Process, where only technical, financial and economic elements should trigger the final result.
Dan Gertler, Fleurette's principal adviser, commented:
"It is vital that the Government of the DRC gets this important legislation right and introduces a regulatory framework which balances the need to create a positive, stable environment that encourages investment to enable the DRC to capitalise on its hydrocarbons wealth, while ensuring the people of the DRC are able to see the benefits in the form of increased royalties and revenues. Without the investment of both finance and expertise into the DRC then it cannot capitalise on this wealth and the DRC will not be able to achieve its long terms aims to dramatically increase oil production."
The Fleurette Group of Companies ("Fleurette") is an entrepreneurial business with significant investment in diverse sectors, including natural resources, infrastructure, agriculture and technology. Fleurette has substantial investments and operations in the Democratic Republic of Congo (DRC). The parent company of the group, Fleurette Properties Limited, a Dutch resident company, is owned by Line Trust Corporation Limited strictly and solely as trustees of the Ashdale Settlement, a trust established in 2006 for the benefit of the family of Dan Gertler. Mr Gertler is a citizen and resident of Israel and the DRC (and honorary counsel to the DRC) and is committed to developing the country's natural resources and infrastructure, while investing in the Congolese people and their communities.
Fleurette has a proven track record of successful co-operation with diverse parties, including the DRC State-owned mining company Gécamines, and to date has brought more than USD $7 billion of investment into the DRC, on top of its USD $2 billion in private investment. As a result, Fleurette's subsidiaries and partnerships support around 30,000 jobs in the DRC and are amongst the DRC's leading taxpayers, contributing significant revenues to the State.
Fleurette is also a major contributor to social development in the DRC through the Gertler Family Foundation (GFF) and through direct investment in social infrastructure. The GFF is the largest charitable organization in the DRC, funding more than 50 programs and projects across the DRC, which help tens of thousands of Congolese every year. These include rebuilding key hospitals, notably the Kisangini "Hospital du Cinquantenaire"; supporting the Operation Smile campaign in Lubumbashi and Kinshasa; rebuilding Blaise Pascal School in Lubumbashi; and supporting the Lubumbashi Zoo.
Food security is a critical issue for the DRC and in Kinshasa, Fleurette and the GFF are developing 1,482 acres of land into the Kitoko Food Farm in partnership with local and international organizations. The farm is expected to employ 400 people and is expected to produce more than 4,500 tons of carrots, tomatoes, onions, potatoes and other vegetables in 2014. For more information on the GFF and its operations please see http://www.gertlerfamilyfoundation.org
About Oil of DRCongo
On 5th May 2010, Fleurette, through Caprikat and Foxwhelp Ltd, two entities created for the Project, entered into a PSC with the DRC Government relating to the oil exploration and production of the Blocks I&II on the Albertine Graben. Presidential Approval was granted on June, 18th, 2010. The Blocks cover an area of over 7000 km2, including onshore and offshore acreage. Caprikat and Foxwhelp Ltd, through Caprikat and Foxwhelp SARL (DRC), hold a 85% interest in the Blocks, while the remaining 15% is held by the DRC Government. Oil of DRCongo was established by Caprikat and Foxwhelp Ltd in the last Quarter of 2010 as Operator. It is responsible, on behalf of the interest holders, for the management and performance of all the activities envisaged by the PSC for the Blocks' development.
Oil of DRCongo welcomes the strong endorsement received from the Minister of Hydrocarbons in the DRC, who has noted the significant progress Oil of DRCongo has made at Blocks I and II on the Albertine Graben, to ensure the continued development of these important oilfields. Out of the five petroleum blocks for which the Government of the DRC has signed PSCs, only Blocks I and II have undergone exploration, carried out by Oil of DRCongo.
The seismic campaign (1st and 2nd phases) has covered approximately 700km offshore and 150km onshore. Oil of DRCongo has invested in excess of $70 million in the exploration works of the Blocks I & II so far including above $20 million on the seismic investigations. The seismic data acquisition itself was carried out by TESLA (UK). Oil of DRCongo employed 250 people based in Kasenyi, out of which 204 were Democratic Republic of the Congo (DRC) locals, for the seismic works.
Oil of DRCongo has now completed the interpretation of the seismic data. Oil of DRCongo's next priority is the establishment of four wells. Oil of DRCongo is carrying out a Feasibility Study aimed at evaluating the entire drilling exercise and in particular, to identify the exact locations of the four wells established by the PSC. The preparation phase of the drilling includes the transport to the sites of the drilling equipment, the installation of a base camp for staff, new supply roads, a new dock on Lake Albert and a landing strip for moving personnel and equipment. The Tender Documents for the drilling works expect to be launched by the end of March 2014. At the same time Oil of DRCongo will identify the new seismic grid necessary to cover the entire available acreage, with particular reference to Block I.
A video of the work being done by Oil of DRCongo can be found here: http://www.youtube.com/channel/UCtp5vMqUpnZWxLlCyDj8l5Q
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SOURCE Fleurette Group