Grynberg Seeks Arbitration against VOG over Cameroon
The rift between Cameroon producer Victoria Oil & Gas (VOG) and its partner Denver-based RSM Production Corp, owned by octogenarian oilman Jack J Grynberg, has resurfaced.
RSM has a 40% interest in the gas-producing Logbaba Concession and has received 40% of revenues from it since May 2016. Five years ago VOG argued that RSM lost its right to the stake because it failed to keep up with development costs. But Grynberg went to an International Chamber of Commerce (ICC) arbitration panel and in 2013 won his case.
Now acknowledging a recent Cameroonian media article, VOG confirmed August 26 that RSM filed another request for arbitration with the ICC on July 22, this time regarding the rig and drilling contractor selected by VOG to conduct the drilling of two new wells at Logbaba.
Jack J Grynberg has mounted legal challenges to oil corporations elsewhere in the world too, including over Kashagan in Kazakhstan (Photo credit: http://jackgrynberg.blogspot.co.uk/ )
London-listed VOG says that on July 29, RSM filed a complaint and application for injunction with the US District Court for the Southern District of Texas to seek a temporary halt to drilling during the arbitration. On August 12, VOG and its subsidiary Gaz du Cameroun (GDC) responded to RSM's application for injunction, arguing that RSM had approved the operations (including the rig and drilling contractor), the rig was in Cameroon being assembled, and therefore an injunction was not warranted.
On 16 August, 2016, RSM withdrew the request for the injunction and dismissed its complaint, according to VOG.
However, it confirms that the arbitration is still pending but that it is not permitted to comment on it, beyond saying what it did at the Texan hearing: namely that it sees no basis to challenge the choice of the rig or drilling contractor. VOG said its Logbaba drilling programme continues, with spudding of the two wells imminent, adding that subsidary GDC is “well placed to continue funding these operations and the drill program with project revenue and bank debt until such time as the arbitration with RSM concludes.”
It's all very different from two months ago when VOG published its 2015 annual report in which its executive chairman Kevin Foo wrote: "I would like to especially thank our partners RSM Production Corporation of Denver, Colorado for their staunch support and sound guidance on the Logbaba project."
VOG has said that average Logbaba 1Q 2016 production at 100% was 13.16mn ft³/d and 150 b/d of condensate.
Mark Smedley