A Review of the Nigerian Energy Industry

Uganda, Congo hold talks over oil exploration

10 August 2012, Sweetcrude, KAMPALA – UGANDA and Congo have held talks over ongoing oil exploration activities in the oil-rich Lake Albertine rift basin, straddling the two nation’s common border.

Uganda’s President Yoweri Museveni held talks Wednesday with his Congo counterpart Joseph Kabila at the end of a regional summit in Kampala, the Ugandan presidency said.

Uganda and Congo are trying to mend fences in the wake of huge discoveries of oil on the Ugandan side of the rift basin.

“President Museveni held talks with…Mr. Joseph Kabila, at State House, with whom he discussed bilateral issues between the two countries,” a presidential spokeswoman said in a statement.

A person familiar with the situation said the two leaders discussed insecurity on the Congolese side of the rift basin as well as the planned demarcation of the common border.

Relations between the two countries have been strained since 1998, when Uganda intervened in Congo’s second civil war on the side of rebels who tried to overthrow Mr. Kabila’s father.

In 2007, Congolese troops fired at an oil exploration vessel on Lake Albert belonging to U.K.-based Heritage Oil Corp., killing a British contract worker. Congo had accused the vessel of carrying out illegal oil exploration on its side of the lake, a charge denied by both Uganda and the company.

The incident almost sparked war between the two countries.
Congo and Uganda later agreed to resurvey the poorly defined border but the process has never fully developed.

While significant progress in oil and gas exploration continues to be registered on the Ugandan side, similar activities on the Congolese side have been hampered by insecurity in the lawless region, which has become a haven of militias, illegal mineral dealers, and terror groups.

The main point of contention between the two nations is Rukwanzi Island, in the south of the lake near the Block 3A oil field formerly owned by Heritage and now operated by China’s Cnooc Ltd.

Both countries claim sovereignty over the island, the majority of whose residents are Congolese nationals and which is presently under a joint administration of Uganda and Congolese authorities. The wells being drilled in the Cnooc-operated block lie uncontrovertibly within Uganda’s borders, and Rukwanzi Island was included in the broader 3A license area at the time that Heritage controlled it.

Heritage subsequently sold some of its interests in the area to Energy Africa, which itself was later taken over by U.K. firm Tullow Oil PLC, before later selling its entire stake to Tullow. In a surprise move, Congo expropriated from Tullow the license areas that lay on its side of the border and handed them to two British Virgin Islands-registered firms, Caprikat and Foxwhelp, neither of which had any prior experience of oil exploration.

In contrast to the rapid progress made on the Ugandan oil fields, the Congolese areas remain underdeveloped. Recent media reports have suggested the Congo government is growing impatient with Caprikat and Foxwhelp and wants to see a marked improvement in exploration and appraisal activity.

In this article

Join the Conversation