* Tullow prospects for regaining blocks "precarious" - court
* Congolese PM backs Divine request for compensation
(Adds new material throughout)
By Katrina Manson
KINSHASA, Nov 25 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 --
"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
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.
Shares in Tullow were little changed, up 0.3 percent at
1,199 pence by 1623 GMT.
(Editing by Mark John and David Holmes)