Petroleum Africa
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Thursday, September 12, 2013
Vanoil Energy Ltd. intends to initiate “conciliation” discussions with the government of Rwanda to resolve a dispute related to the company’s exploration and analysis of an oil and gas asset in the country. Conciliation is the first-step in the commercial arbitration process agreed to by both Vanoil and the Rwanda government to resolve any commercial dispute.
The company has been engaged for more than six years in an oil and gas exploration and evaluation program in the north-western part of Rwanda, better known as East Kivu Graben Basin. Vanoil undertook these activities pursuant to a Technical Evaluation Agreement (TEA) with the Rwanda government. The TEA was necessary to facilitate Vanoil’s exploration and evaluation activities as Rwanda lacked the requisite legal framework to promote, protect and otherwise govern oil and gas exploration in the country.
Under the TEA, Vanoil secured a “Right of First Option” to enter into a PSC with the Rwandan government in relation to any promising oil discoveries identified in the East Kivu Graben Basin. Vanoil has spent in excess of $3 million on its exploration activities based on Rwanda’s commitment to conclude a binding PSC with the company. In June 2013, after many months of negotiation for a PSC, the Rwandan government, without notice or justification, summarily terminated negotiations and, with that, terminated Vanoil’s exclusive rights to develop the East Kivu Graben Basin.
Vanoil has selected a lawyer to participate on the three-person conciliation panel. The company understands that Rwanda has also selected its representative to the conciliation panel and it is expected that a third panelist will also be selected shortly by the parties.
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