Gabon to Seize Field a Dispute With Sinopec Worsens

07 Juin 2013

Bloomberg News/ Businessweek/Financial Times

 By Antoine Lawson and Benjamin Haas

 LIBREVILLE,  June 7 (Infosplusgabon) - Gabon’s oil ministry plans to seize an oil field from China Petrochemical Corp.’s Addax Petroleum as a dispute over production contracts worsens.

Gabonese Oil Minister Etienne Ngoubou will not renew Addax’s license at he Tsiengui field because it had breached the law, a ministry official said today. Gabon already seized Addax’s Obangue field. Two other companies face similar actions, the official said, declining to name them.

 Addax believes the government is in breach of contract over the Obangue takeover in January. 

 Workers at Obangue are unhappy with the deterioration in working conditions since the seizure, Michael Wora, a technician at the site said in an interview. Permanent contracts have not been given to the workers as promised by the oil minister, he said.

 “The production of Obangue dropped since January 2013 from 12,000 barrels a day to less than 6,000 barrels,” he said. “Communities living around Obangue lost their benefits on health care, transportation. The majority of employees wish to leave the Gabon Oil Company and work with Addax.”

 The Financial Times reported the plans to seize fields earlier, citing Ngoubou, the oil minister.

 Four calls to the office number of Lv Dapeng, spokesman for China Petrochemical, or Sinopec Group, went unanswered.

 “When some of these assets were acquired, oil prices were low, and now prices are higher,” Laban Yu, a Hong Kong-based analyst at Jefferies Group, said by phone today. “Maybe the government is hoping to get a larger share of profits. These are a zit compared to the rest of Sinopec’s assets.”

 Addax, based in Geneva, produced 18,100 barrels a day from the area that includes Tsiengui in 2008, the last year for which data is available. China Petroleum and Chemical Corp., the listed unit of Sinopec Group, produced 328 million barrels of crude oil last year.

 Gabon Oil Co. was created by the government in June 2011 to manage state shares in oil assets.

Read Full  story  : http://www.businessweek.com/news/2013-06-06/gabonese-judges-to-arbitrate-over-seizure-of-addax-s-oil-field

 FIN/INFOSPLUSGABON/ANL/GABON 2013

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