A gas extraction barge on the shores of Lake Kivu in Karongi District, Western Province. Photo/Cyril Ndegeya
By ALEX NGARAMBE Rwanda Today
In Summary
- Canadian oil and gas company, Vanoil, has invested in oil exploration in the Lake Kivu region for the past seven years but the alleged disagreement is said to have led to the amicable cancellation of the deal between the two parties.
An oil exploration deal reportedly collapsed
after a foreign company demanded a 80 per cent share once oil was
discovered in the Kivu belt, which the government rejected.
The Canadian oil and gas company has invested in
oil exploration in the Lake Kivu region for the past seven years but the
alleged disagreement is said to have led to the amicable cancellation
of the deal between the two parties.
Rwanda Development Board (RDB) is the chief
negotiator for the exploration of oil in the region, which borders
Democratic Republic of Congo (DRC), and with the cancellation of the
deal with Vanoil, plans are under way to contract new companies to
proceed with the exploration works.
Details of the share the government had demanded
were not clear as we went to press, although the collapse of the deal
was partly premised on a dispute arising from the sharing of the spoils.
“We have settled our differences amicably and out
of court in regard to the oil exploration deal,” said Cabinet Minister
Valentine Rugwabiza, the chief executive officer of RDB.
RDB tight-lipped
RDB was however tight-lipped about the details of production sharing agreements with the Canadian company.
“We can’t give details of what transpired between us and Vanoil,” added Ms Rugwabiza.
Rwanda is hopeful of discovering the oil in the
Kivu, given the similarity in the region’s geographic and geological
features with the albertine region of Uganda where huge deposits the
resource have been discovered.
According to the exploration law, even if a mining
firm invests huge sums of money in prospecting and no minerals are
found, it is not compensated for the effort.
Demand lion’s share
This is being seen as the reason that could have
motivated Vanoil to demand the lion’s share in the agreement since it
had sunk huge chunks of money in the exploration.
Last week, a Vancouver-based Canadian
international oil and gas development company announced that Vanoil and
Rwanda had agreed to end their discussions regarding the exploration of
Lake Kivu in Rwanda following expiry of the Technical Evaluation
Agreement (TEA) between them in June 2013.
As part of this agreement, the government and
Vanoil amicably resolved the issues referred to in the Conciliation
Committee under the TEA, it added.
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