13 January 2017, Kigali – Oil exploration in Rwanda has stalled after negotiations with Chinese firm BGP suddenly collapsed, The EastAfrican has learnt.
The country expected to resume oil exploration in November last year when BGP — which also conducts explorations in Kenya and Tanzania — won a tender in May to explore for the “black gold” in Lake Kivu.
But sources privy to the matter confirmed that oil exploration may have to wait a bit longer after negotiations between government and BGP hit a dead end, even when a draft contract had been adopted by both parties.
The Minister of Natural Resources, Vincent Biruta, declined to explain why the negotiations collapsed, noting that the procurement process is still ongoing and that no company had won oil exploration rights in the country.
“I cannot interfere in the process or comment on companies that bid to explore oil. We will wait for the procurement process to be concluded and know who is selected. The company selected will then sign a contract; but until then I cannot comment,” Mr Biruta said.
Thereafter, in mid July, a negotiation team led by Dr Michael Biryabarema, the former deputy general of the Geology and Mines Department, met with the manager of BGP Kenya, Feng Wenhui, and discussed the terms of the contract that would be signed between both parties.
During these talks, which lasted three days, BGP requested, among other things, the government to seek access to explore for oil across the DRC portion of Lake Kivu in order to get better data.
This request was granted later in August when both Rwanda and the DRC agreed to explore a portion of the lake within each other’s territory.
Under the contractual terms, BGP also agreed to fully fund training for up to six Rwanda staff in petroleum engineering.
Since then, however, no contract between the two parties exists, with sources saying that officials at the ministry may have had a change of heart.
“Officials may intend to silently push BGP out — an act that could boil into a lawsuit against the government because the company underwent heavy costs to procure the tender,” a source said.
“The collapse of in negotiations also occurred at a time when a reshuffle happened at the ministry, whereby the team that had conducted the negotiations was changed; the new team is apparently not very keen on signing with BGP,” he added.
`- The EastAfrican