Battle for TZ gas deal goes to court

Ophir is the biggest oil and gas explorer in the East Africa region. The Tanzanian fields that the firm discovered with its partner BG Group are estimated to hold 15 trillion cubic feet of provable natural gas. In November last year, Ophir Energy PLC sold part of a giant natural gas discovery off the coast of Tanzania to Singapore’s state-owned Pavilion Energy for $1.3 billion, the UK-based Ophir said on Thursday. 

By Bernard James,The Citizen Reporter

In Summary

• Tanzanian businessman who lives in South Africa asks the High Court to declare that the firm cheated him into surrendering his 15 per cent interest
• Moto Mabanga claims Ophir Energy  forced  him to sell his stake  because he is a black African

Dar es Salaam. A former business partner at Ophir Energy, a leading oil and gas exploration company, has sued the firm for allegedly locking him out of lucrative deals fraudulently.

Tanzanian businessman Moto Mabanga, who lives in South Africa, has asked the High Court to declare that the company cheated him into surrendering his 15 percent interest in three gas blocks located in Mtwara at a throw away price. He has also sued the company’s subsidiary, Ophir Services, and British Gas Tanzania--which has joint business interests in the Mtwara oil fields.

In a case filed on Monday at the commercial division of the High Court, the businessman claims that the $7.5 million offer that the London-based companies paid him to acquire his shares was made in bad faith and was aimed at underpaying him.

Mr Mabanga claims the company approached him on March 5, 2010, seeking to buy his interest of five percent in each of the three blocks.

The businessman claims he initially declined the offer but Ophir, through CEO Alan Stein, exerted undue pressure on him and he finally caved in and sold the shares at a low price. The Ophir Energy and Ophir Services agent reportedly gave Mr Mabanga less than 48 hours to make up his mind. He argues that the offer to buy his interest was made in bad faith, the intention being to underpay him.

Ophir is the biggest oil and gas explorer in the East Africa region. The Tanzanian fields that the firm discovered with its partner BG Group are estimated to hold 15 trillion cubic feet of provable natural gas.

In November last year, Ophir Energy PLC sold part of a giant natural gas discovery off the coast of Tanzania to Singapore’s state-owned Pavilion Energy for $1.3 billion, the UK-based Ophir said on Thursday.

Pavilion, which is owned by the Singapore state investment fund Temasek, consequently got a 20 per cent share of Ophir’s licences in Blocks 1, 3 and 4, located in waters off the coast of Tanzania. The deal depends on the Tanzanian government’s approval.

Mr Mabanga has accused the two companies of unilaterally drafting a deed of termination to pay him $7.5 million for his interests in the three blocks. “This amount is far less than the actual value of the plaintiff’s interests in the blocks,” he claims.

According to the businessman, the termination was designed to deny him his rightful future earnings, benefits and profits.

Defamation claims

The businessman is also accusing the companies of using Kigoma North MP Zitto Kabwe to defame him by spreading tales that he engages in high level corruption. Last year, the Kisutu Resident Magistrate’s Court ordered Mr Kabwe to pay Mr Mabanga Sh3 million for spreading lies against him.