Major DR Congo oil deal could be 'void': Watchdog

phys.org | 2/1/2019 | Staff
MysticHeart (Posted by) Level 3
Click For Photo: https://3c1703fe8d.site.internapcdn.net/newman/gfx/news/2019/salongaisthe.jpg

A major deal allowing a company to drill for crude reserves in areas of the Democratic Republic of Congo bordering Africa's largest protected rainforest may contravene the country's own oil law, a watchdog said Friday.

The transparency group Global Witness said that an agreement signed in 2007 between the government and Compagnie Miniere Congolaise SPRL (CoMiCo) and approved in February 2018 by outgoing president Joseph Kabila could be considered void as it was forged under outdated legislation.

NGO - Damage - Project - Part - Salonga

The NGO also warned of the potentially catastrophic environmental damage were a large-scale industrial project surrounding part of the famed Salonga National Park to go ahead.

DR Congo, a vast, mineral-rich nation plagued by unrest, passed new legislation in 2015 requiring future oil contracts to pay an annual area tax of $100 per square kilometre where a company conducts oil exploration.

Global - Witness - Agreement - CoMiCo - Square

Global Witness said that under the agreement CoMiCo needs to pay just $2 per square kilometre per year—a rate the watchdog said would leave the treasury of the impoverished state short millions of dollars.

In addition, the 2015 law states that 35-45 percent of profit oil—the share of production left after costs have been deducted—should go back to national stocks.

Legislation - CoMiCo - Agreement - Percent - Share

Signed under legislation dating to 1981, CoMiCo's agreement grants only a 30 percent share of profit oil on the first eight million barrels produced, according to the NGO. The tax rises to 40 percent for anything after that.

Global Witness said that the declaration of Kabila, who was replaced by his chosen successor Felix Tshisekedi after much-delayed elections in December, left the deal in need of review as it contained several provisions out of line with the new oil law.

Manner - Contract

"The questionable manner in which this contract was...
(Excerpt) Read more at: phys.org
Wake Up To Breaking News!
Sign In or Register to comment.

Welcome to Long Room!

Where The World Finds Its News!