Congo Violence Forces UK Oil Explorer to Halt Operations

KAMPALA - Renewed fighting between Congolese rebels and government forces has forced U.K.-based wildcatter Soco International PLC to evacuate workers from its oil exploration camp in the country's restive eastern region to a site across the border, Ugandan police and the company said Tuesday.

Soco has started moving equipment and expatriate workers from areas around the Virunga National Park in North Kivu to the Ugandan border district of Kanungu, said Western Uganda police spokesman Elly Maate.

A Soco spokesman confirmed that the company has suspended its exploration work in Congo, but said the halt was "temporary" pending a final assessment of the situation. He said its main helicopter landing site has also been re-located to Uganda, from where Soco will continue to monitor events.

"SOCO is assessing the security status on a continual basis. The safety of SOCO's personnel is of paramount importance and, therefore, they'll only proceed when it is safe to do so," said SOCO Executive Vice President Roger Cagle.

The company's decision underscores a worsening security situation in North Kivu, where Congo's ill-equipped army is attempting to halt a rebel advance. The most recent fighting which erupted in April, after renegade former army General Bosco Ntaganda defected with hundreds of troops has already chocked mineral exports from North Kivu.

Soco operates an 800-square kilometer oil block in Eastern Congo, within the Lake Albertine Rift basin. Oil exploration companies have discovered more than 2 billion barrels of crude on the Ugandan side of Lake Albert and companies like Soco are hoping to make similar finds on the Congolese half of the basin.

According to Peter Lokeris, Uganda's junior energy minister, Uganda is bound by the 2007 agreement with Congo to cooperate with oil companies on the Congolese side of the border and "accord them the necessary assistance".

"The existing agreement provides that we cooperate in the exploitation and management of cross-border hydro carbons" Mr. Lokeris said.

While Uganda has made significant strides in its oil exploration activities in the basin, similar activities on the Congolese side continue to be impeded by insecurity.

Soco's other exploration projects in Africa are in the Congo Republic and Angola. The company also has an oil producing project in Vietnam, producing an average of 50,000 barrels of oil a day.

Last month, Soco said that it plans to spend up to $25 million buying oil assets in Africa.

Copyright (c) 2012 Dow Jones & Company, Inc.


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