UPDATE 1-Tullow loses Congo oil injunction - court document
* Tullow prospects for regaining blocks "precarious" - court
* Congolese PM backs Divine request for compensation
(Adds new material throughout)
KINSHASA, Nov 25 (Reuters) - London-listed Tullow Oil Plc (TLW.L) lost an injunction to stop two offshore companies developing oil blocks to which it lost the rights in Democratic Republic of Congo, according to a court ruling seen by Reuters.
Tullow Oil was awarded rights to Blocks 1 and 2 of Congo's Albertine Graben in 2006. It is pursuing legal action against Congo and two British Virgin Islands-registered companies to which President Joseph Kabila re-awarded the rights in June.
A court ruling seen by Reuters said Tullow's prospects of regaining the blocks were "precarious" and refused to renew an interim injunction first granted in September to prevent the companies from developing the blocks.
"It is my view that the balance of convenience comes down firmly in favour of refusing to continue the interim injunction," said Commercial Court Judge Edward Bannister in the Eastern Caribbean Supreme Court in the British Virgin Islands, where the two offshore firms -- Caprikat Ltd and Foxwhelp Ltd -- are registered.
"Crudely put ... Tullow has no obvious prospects of ever reaching the position of being entitled to enjoy the fruits of its PSC (Partnership Sharing Contract), yet is determined that no other person shall be permitted to exploit the territory."
In the judgment dated Nov. 19, Bannister said continuing the injunction would interfere with the expressed will of the head of a sovereign state.
Kabila provoked widespread investor concern when he signed over the rights to blocks 1 and 2 -- already contested by South Africa's Divine Inspiration Group, which paid a $2.5 million signature bonus for block 1 -- to Caprikat and Foxwhelp.
The two companies paid $6 million in signature bonuses for the two blocks, according to documents seen by Reuters which show that President Jacob Zuma's nephew Khulubuse Zuma has power of attorney over Caprikat, while his lawyer Michael Hulley has similar powers for Foxwhelp.
"I'm very happy ... extremely happy," Zuma told Reuters by telephone, adding the injunction had held up exploration development and a social works programme, for which the companies have raised $7.5 million, by two months.
"Tullow lost and they didn't appeal. It means that everything goes ahead," said Zuma.
Tullow has also initiated international arbitration against Congo in Paris. The company, whose Vice-President Tim O'Hanlon has previously said Congo took away the blocks in a "smash and grab" move, did not immediately reply to requests for comment.
Congo itself has a 15 percent stake in both blocks.
Separately, Congolese Prime Minister Adolphe Muzito agreed to a request from Divine, which lost rights to the disputed Block 1 but was granted a presidential decree to Block 3 in which it has a 42.5 percent stake, for $5.2 million in compensation, according to a letter dated Nov. 16 seen by Reuters.
The money represents $4 million already paid by the company for a signature bonus and security payments, and a further $1.2 million charged as interest, according to the letter.
Divine previously told Reuters it is also seeking presidential ratification for three blocks in central Congo, following a 2007 partnership contract.
- Alabama man gets $1,000 in police settlement, his lawyers get $459,000
- Probe: Athletes took fake classes at University of North Carolina
- Canada's Harper pledges tougher security laws after attack |
- Some U.S. hospitals weigh withholding care to Ebola patients
- Man arrested after jumping White House fence, causing lockdown