Page 19 - AfrOil Week 40 2022

AfrOil NEWS IN BRIEF AfrOil

business new africa bna/IntelliNews

Company is still seeking a partner to share the finding could have a material impact upon the mainly through the Medgaz pipeline.
cost and risk of the commitment well. position of the Group. Algerian gas exports to Spain have dropped
La-108 Insurance Claim: The Company con- Suspension: Owing to the financial uncer- in recent months on the back of escalating ten-
tinues to pursue the insurance claim for the well tainty created by the ICC Award against GDC, sions between the two countries, especially after
control incident that occurred in March 2017. the Company’s shares were suspended from Spain shifted its foreign policy and announced
RSM Litigation: Following the Partial Final trading on AIM as announced on April 4, 2022. its support for Morocco’s autonomy plan for
Award in April and the Addendum in July, the The suspension of VOG’s shares remains in Western Sahara. In June, Algeria suspended a
Company continues its settlement discussions place whilst the Company attempts to finalise a co-operation treaty with Spain in response to
with RSM, including recent face-to-face dis- settlement with RSM as noted above. A further the latter’s policy shift and restricted commercial
cussions in the US. Such discussions have been announcement will be made later this month to transactions with Madrid.
cordial and constructive, and a framework for update shareholders. Sonatrach had agreed price revisions with
settlement has been proposed with a view to Funding: Until there is resolution with RSM, six partners until that moment, its head Tewfik
signing a term sheet this month, though there the Company is unable to raise funds via the Hakkar elaborated.
can be no guarantee of concluding this or subse- equity markets. In addition, given the debt level Enel agreed to pay more for gas. The price
quent legal documentation leading to an agree- and material uncertainty with respect to the Naturgy will pay is set by contract rather than by
ment. Meanwhile the parties, who are partners in ICC Award, it is practically impossible for the spot prices, Hakkar added. Naturgy paid about
the Logbaba project, continue to work together Company to raise debt financing. The parent €38 per MWh for Algerian piped gas between
to maximise the value of the Logbaba field. company is therefore currently wholly reliant January and April, and the price is likely to
Consultant Litigation: The Company is in dis- on internally generated funds, the receipt of increase by about €10 per MWh under the new
pute with a former consultant regarding whether which vary in quantum and timing. As a result, deal.
any remuneration is due for services allegedly the financial position of the Company is pre- Algeria was Europe’s third-largest gas sup-
provided in Cameroon from 2010 and directed carious. The Company remains in regular com- plier in 2021 after Russia and Norway. It exports
at obtaining various licences and authorisations munication with its creditors, including one of gas to Europe via pipelines to Spain and Italy.
for the Company. This matter was first disclosed its major shareholders and loan note holders, Algeria has pledged to increase its energy sup-
in the Annual Report and Accounts for the year Hadron Master Fund, whose Loan Note was due plies to Italy by 20% this year to around 25bn
ended December 31, 2016. for repayment in April 2021 and who remains cubic metres. Algeria was Spain’s biggest gas
In the 2016 Accounts, the Company reported supportive of the management team’s efforts to supplier last year, accounting for 43% of the total
that certain commercial royalties were subject resolve the financial situation of the Company gas needs of the European country
to legal proceedings that were initiated by the and has re-confirmed its support as previously bna/IntelliNews, October 3 2022
Company. The 2017 legal proceedings included announced in May 2022.
a substantial counterclaim advanced against Victoria Oil & Gas, October 5 2022 Nigeria has shut down
the Company. In 2019, the Company elected to
withdraw its 2017 legal proceedings due to the 365 illegal oil refineries
apparent financial weakness of the respondent, POLICY
as he was unable to pay his share of the deposit linked to Forcados
requested by the ICC ahead of the arbitral pro- Algeria benefits from
ceedings. Consequently, the counterclaim was The Nigerian National Petroleum Company
not pursued by the Counterparty at that time. gas deals with Spain, Limited (NNPC) has shut down the operations
In February 2021, the Counterparty initiated of 395 illegal refineries linked to the Niger River
an ICC arbitration claim against the Company in Italy on prices revision Delta town of Forcados, it has revealed.
respect of the same subject matter and therefore Nigeria’s oil sector has been plagued by rising
in substantially the same terms as the counter- Algeria’s new gas deals with Italy and Spain will crude theft over recent months, causing Nigeria’s
claim in the 2017 legal proceedings. In defending result in more benefits for the North African average crude production to fall to below 1mn
the 2021 legal proceedings, the Company noted country as natural prices in Europe are expected barrels per day (bpd) in August, down from a
that once again the Counterparty appeared to to soar as winter approaches, according to a previous high of 1.8mn bpd.
be unable to pay his share of the deposit on the report by Bloomberg on Sunday, October 2. As revealed by NNPC managing director
dates prescribed by the ICC. The Counterparty Algeria’s state energy producer Sonatrach Mele Kyari on October 4, oil theft has even been
was therefore at risk that the 2021 legal proceed- concluded a deal with Italy’s Enel last week, and discovered in the sea, with the company discov-
ings would be struck out. The Company notes is expected to sign another deal in the next few ering an illegal connection running from the
that payment of the Counterparty’s outstanding days with Spain’s Naturgy after lengthy talks Forcados pipenline system. Kyari estimated that
deposit was made, and the virtual arbitration over contractual prices. The Algerian gas flows this pipeline has been around for nine years.
took place last week. The arbitration ruling is
currently expected before the end of the year.
Arbitrations under the ICC Rules are sub-
ject to data protection and are confidential
processes, so VOG is not permitted to provide
details or comments on the issues beyond say-
ing that it considers the claim against it in the
2021 legal proceedings to be without merit and
that it continues to vigorously defend the claim.
The amount under dispute in the arbitration
is potentially significant such that an adverse

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