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The Democratic Republic of Congo is considering taking over two oil licenses from an Israeli billionaire who is under U.S. sanctions for corrupt deals, and sell the exploration blocks to another operator, Bloomberg reports, quoting people familiar with the talks.
Israeli businessman and billionaire Dan Gertler, whose companies hold the licenses for exploring for oil on two blocks in Congo close to the border with Uganda, was sanctioned by the U.S. Treasury in December 2017.
Gertler “has amassed his fortune through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals in the Democratic Republic of the Congo (DRC),” the Treasury said, when it slapped sanctions on the businessman and on dozens of companies he owns or is affiliated with. The sanctioned companies include Oil of DRCongo and two firms it manages, Caprikat Limited and Foxwhelp Limited, which hold the licenses for the two blocks.
“Gertler has used his close friendship with DRC President Joseph Kabila to act as a middleman for mining asset sales in the DRC, requiring some multinational companies to go through Gertler to do business with the Congolese state,” the U.S. Treasury says.
But now, Congo is reportedly looking to transfer those licenses to the state oil firm Sonahydroc and later sell them to another operator. Congo’s government has been talking to UK-listed Tullow Oil, which has oil licenses in the Lake Albert area on the Ugandan side of the border, Bloomberg’s sources said.
According to two of those sources, France’s Total and Italy’s Eni have expressed interest in the Congo licenses in the past, but Eni told Bloomberg it wasn’t interested, while a Total spokeswoman said that Total had quit Congo.
Gertler’s firms could get some compensation for the two oil licenses, to the tune of US$150 million, but according to Bloomberg’s sources and analysts, a transaction would turn out to be complex because Gertler and his firms are under U.S. sanctions.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.