* Firms that won Congo's Blocks 1 and 2 owned by
(Refiles to clarify in bullet point that trust is
administered in Switzerland)
By Katrina Manson
KINSHASA, Aug 16 (Reuters) - Two offshore companies awarded
contested oil blocks in eastern Democratic Republic of Congo
said they will start on the development programme ahead of
target and that it was not the right time to identify their
In July, Congo President Joseph Kabila signed decrees giving
Lake Albert's Block 1 and 2 that lie alongside Uganda's oil-rich
frontier to two companies named Caprikat and Foxwhelp, which are
registered in the British Virgin Islands and claimed by
Khulubuse Zuma, nephew of South African President Jacob Zuma.
"We have already paid $9 million for the signature bonuses,
exploration licences and other contributions," said Giuseppe
Ciccarelli, head of Swiss-based Medea Development SA, a
technical consultant to the blocks and authorised to speak for
"We have 18 months to complete all the preliminary work, but
we are going to conclude well before that, I think in 12
months," he told Reuters in an interview late last week.
Seismic surveys and other preparatory work are set to start
this year and cost about $4 million, with the first exploration
drilling to start next year and run into 2012, Ciccarelli said.
He said the companies would also spend up to $3.5 million on
social works including tarring a road, a hydroelectric plant and
improved water supply for the local community.
"Nobody could say we are not doing well -- in four weeks we
have done something that nobody did for the last three, four
years," said Ciccarelli, who said an environmental impact study
would meet international standards.
Ciccarelli said the offshore companies are owned by a trust
administered in Switzerland and are setting up a local company
named Oil of Congo, a joint venture in which the two companies
will have 85 percent and the state 15 percent. In an unusal
arrangement, state oil company Cohydro has no stake in the deal.
"A trust started Caprikat and Foxwhelp ... they are
financial and industrial investors," said Ciccarelli.
"It is not the right time to say who the investors are,"
said Ciccarelli, who regularly visits Congo and is establishing
a team of four expatriates to do the geological survey work.
Geneva lawyer Marc Bonnant, who is the legal representative
of the two companies and administers the trust, according to
Ciccarelli, signed power of attorney over to Khulubuse Zuma for
Caprikat and to South African lawyer Michael Hulley for
Foxwhelp, in documents seen by Reuters.
Neither Zuma nor Hulley have shares in the firms, Ciccarelli
Social activists in the region have complained that the
contract is opaque and say they fear oil could become a source
of conflict in the unstable region, which is home to several
residual armed groups.
In a declaration dated July 29 and addressed to President
Kabila, the Ituri Civil Society (SOCIT) group also complained of
ambiguity over the investors' identity and called for an
increase of the state share to 30 percent from 15 percent.
The firms have acted swiftly since beating Britain's Tullow
Oil and South African consortium Divine Inspiration Group, which
was backed by state oil company PetroSA, to the two blocks.
Both of the rival companies paid signature bonuses but had
been waiting years for presidential ratification and have since
been told to seek reimbursement by the ministry of hydrocarbons.
Both say they have rights to the blocks and are considering
Sources close to the discussions say Italian oil major Eni
is seeking an interest in the two blocks, and this month was
granted authorisation by the state to access data to oil blocks
including those of Lake Albert's Block 1 and 2.
Ciccarelli, who used to work for Eni, said the Italian oil
giant was clearly interested in Congo's potential but had made
no approach to Caprikat or Foxwhelp.
(Editing by Daniel Magnowski and Jane Baird)