A Review of the Nigerian Energy Industry

Tanzania: British gas exploration firm denies bullying businessman

18 October 2014, Dar es Salaam – A BRITISH company dealing in gas exploration has thrown the ball into the court of two other foreign firms accused of pushing out Tanzanian businessman, Moto Matiko Mabanga over a deal concerning three offshore gas blocks in Mtwara Region.

While the two firms, Ophir Energy PLC and Ophir Services PTY Limited admit that interest by Mr Mabanga in the blocks were identified as red flag in a transaction for introduction of a new partner in the business, the British Company, BG Tanzania Limited, is of the opposite view.

BG-Ophir-Strike-Net-Pay-at-Mzia-3-Appraisal-Well-TanzaniaIt is stated in the suit lodged by Mr Mabanga, that in December 2009 and January 2010, Ophir Energy PLC and Ophir Services PTY Limited started negotiations with BG Tanzania Limited on the possibility of assigning 60 per cent interests in Block One, Three and Four.

But he alleges that it was a condition given by BG Tanzania Limited that prior to such assignment, the five per cent interest allocated for him (Mabanga) in each of block should be done away by hounding him out through nominal compensation for his interest.

The businessman alleges in the plaint filed at the High Court’s Commercial Division that BG Tanzania Limited maintained that he was a “red flag” and “an obstacle to the transaction” at the same time it was a “big dogs” game.

As a result, the three companies allegedly planned, schemed and executed a plan to elbow him from his right in the said companies and extinguish his five per cent interests therein from the blocks situated in Southern Tanzania.

In a written statement of defence, BG Tanzania Limited distances itself and disputes its alleged role in the negotiations, which culminated in the agreement for assignment of 60 per cent interests in respect of the three blocks and giving any condition of chasing Mr Mabanga.

Furthermore, BG Tanzania Limited denied to have planned, schemed or to have executed a plan to elbow the businessman from any companies in which he was a member or in relation to his alleged shares or interests in gas blocks.

However, in their joint defence, Ophir Energy PLC and Ophir Services PTY admit that Ophir Group held discussions with various third parties, including BG Tanzania Limited and during higher stages of negotiations Mabanga’s interest was identified as potential red flag to the deal.

They state that there was a point at which one Dr Alan Stein, acting for Ophir Services PTY Limited, began negotiations with Mr Mabanga for the termination of his interest under the consultancy agreements.

The negotiations culminated in the deed of termination dated March 19, 2010 entered between Mr Mabanga and Ophir Services PTY Limited, pursuant to which the businessman was paid 7.5 million US dollars in return for his five per cent interests in the blocks.

Nevertheless, in the plaint of the suit filed by advocates Mabere Marando, Gabriel Mnyele and Jethro Turyamwesiga, the businessman claims to have been deceived fraudulently to surrender his interests in the three blocks in question.

According to him, he was coerced to sign a termination agreement to receive undervalued consideratin of 7.5 million USD, thus depriving his rights to own property on fair payment and was forced out of the new corporate set because he was an African.

He is accusing Ophir Energy PLC and Ophir Services PTY Limited of failure to disclose to him the actual and potential value of oil and gas in the blocks and gave false reasons unfair to him and applied unfair valuation methods to determine the value of his interest.

It is alleged further that Ophir Energy PLC and Ophir Services PTY Limited did not disclose to Mr Mabanga the transaction with BG Tanzania Limited and the amount that the latter was paying for assignment of 60 per cent interest in the blocks.

Given the recent disclosure by the companies of the sale of 20 per cent interests to Pavilion Energy Pte Limited at 1,288,000,000 USD, the value of the three blocks is 6,440,000,000 USD, thus BG Limited must have paid a large amount for the 60 per cent interests.

“The defendants’ (the three companies) acts of forcefully and fraudulently ejecting the plaintiff from Ophir amounted to breach of the Consultancy Agreements.

The plaintiff was entitled to a five per cent free carry share interest in Block One, Three and Four perpetually,” he claims.

As a result, Mr Mabanga alleges in his suit, that he has lost his entitlement of five per cent interest in the profit acquired and that to be acquired from production and other economic activities deriving from the blocks and has suffered general damages.
*Faustine Kapama – Tanzania Daily News

In this article

Join the Conversation