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Tuesday, December 17, 2013
RSM Production Corp. (RSM) has won against Victoria Oil and Gas PLC (VOG) regarding VOG’s asserted ownership of rights in the Logbaba Concession in Cameroon. On November 30 a unanimous International Chamber of Commerce (ICC) Arbitration Panel affirmed RSM’s 40% interest in Logbaba.
Jack J. Grynberg, president and CEO of RSM said the ruling was a significant victory for RSM and vindicates its long held position. He went on to say that the VOG board had repeatedly made inaccurate and incomplete claims concerning the ownership of their major asset. “As I have pointed out before, their claim that they owned a 95% working interest in the Logbaba Concession was false and has resulted in protracted, expensive, and unnecessary arbitration on account of VOG.”
The arbitration ended with the unanimous finding that RSM owns 40% of the Logbaba Project, along with certain other incidental rights. The arbitration also confirmed that RSM owns 100% of the Logbaba No. 101 and No. 103 wells and VOG has 0% in these two bypassed natural gas condensate wells.
“As president and chief executive of RSM I have been involved in the Logbaba Concession since it was initially granted to RSM in May 2001. I intend to review all strategic decisions that have been made unilaterally by VOG without regard to RSM’s rights in the project. Going forward, RSM will be actively involved in the management and operation of all commercial projects in respect of the concession and I will continue to take such steps as are necessary to protect its interests,” said Grynberg.
The company has written to VOG requiring an audit of its project management and requiring that it now pays to RSM its overriding royalty on gross production estimated by RSM to be $510,000.
Meanwhile, RSM’s International Center for Settlement of Investment Disputes (ICSID) case against Cameroon is proceeding to arbitration. RSM’s claim is for declaration, rescission, and damages on the basis that VOG and Cameroon made unilateral detrimental concessions on gas price and license area without the authority and agreement of RSM. The case was registered on July 1, 2013 and a first hearing is expected early-2014.
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