Mr Moses Wetangula. Photo/FILE
By KIPCHUMBA SOME ksome@ke.nationmedia.com
Posted Saturday, March 31 2012 at 22:30
Posted Saturday, March 31 2012 at 22:30
Despite his denials, Trade minister Moses Wetang’ula was closely linked to a foreign company that sold a block of land where oil was discovered in Turkana, the Sunday Nation has established.
For an unspecified period of time, Mr Wetang’ula was an adviser to Turkana Energy Incorporation (TEI), the parent company of Turkana Development Corporation (TDC), which sold Block 10BB for $10 million (Sh840 million) in 2010.
TDC sold the 3.1 million acre block of land to Canadian firm Africa Oil Corporation which, in turn, sold 50 per cent of its stake in the Block to Anglo-Irish firm Tullow Oil which struck the black gold in Ngamia 1 well.
The Sirisia MP has denied any personal links to the deal, only admitting that the law firm he founded, Wetang’ula, Adan and Makokha Company Advocates, acted in the transaction.
He said he resigned from the company nine years ago when he was appointed to Cabinet, but the new information seems to suggest that he might have played a prominent role in the overall affairs of TEI.
A 2008 online brochure on Block 10BB project summary lists Mr Wetang’ula as one of TEI’s two advisers. However, the website did not describe Mr Wetang’ula’s role(s), but only cited his academic, professional and political credentials.
The other adviser is Mr Daniel M. Jarvie who is described as a “well-respected businessman, educator, scientist and philanthropist (who) has educated hundreds of Africans and other geoscientists and supported the creation of technical laboratories across the continent.”
The company’s management team consisted of six board members headed by Mr Dale Wetherbee. Mr Amyn AH Lakhani, a Kenyan born UK resident, was vice-president of business operations.
The company was acquired by Africa Oil Corp in July 2009. It is unclear whether Mr Wetang’ula had any shares in the company. Efforts to reach him yesterday on his mobile phone to comment on the issue were unsuccessful.
He did not answer our calls and did not respond to SMS messages sent to him.
The text message we sent to him read:
“Hello, my name is Kipchumba Some from Nation. I am in possession of a brochure that indicates that you were an adviser to Turkana Energy Incorporation, the parent company of Turkana Development Corporation that sold Block 10BB to Africa Oil Corp. I want to know what your roles in TEI entailed. Kindly get in touch since I am doing the story for tommorow’s (Sunday) paper.”
The TDC-Africa Oil Corp-Tullow Oil transaction highlights the manner in which licence holders have been making millions of shillings selling licences to third parties.
TDC entered into a Production Sharing Contract with the government in October 2007 for Block 10BB for a three-year exploration period.
It was in this block that oil was discovered by Shell at Loperot I well in 1992.
It is unclear why the TDC decided to sell its stake yet it had written a glowing assessment of the potential of Block 10BB. Some observers suspect it could be due to lack of enough funding and technical abilities to see the project through.
“In addition to the Loperot discovery, mapping has identified 5 prospects and 17 leads. The NI 51-101 Resources Evaluation Report, prepared by independent appraisers Gaffney, Cline and Associates, evaluated the discovery, prospects and leads on the block, giving them a range of 1,770 million to 6,360 million barrels of unrisked recoverable oil resources,” TDC wrote in its assessment.
“This potential is in addition to the 20-25 million which may have already been discovered by the Loperot well. A full prospect inventory for the block has been finalised. Screening economics indicates reserves as low as 10 million barrels may be economically developed under certain development and price scenarios.”
“Either the assessment was true or the company was simply hyping up the Block’s potential in readiness to dispose it to other bigger companies,” said Mr James Shikwati, an economics analyst. It has also emerged that TDC was accused of unfair business practices in a case in which Interstate Petroleum Company (IPC) had sued the Permanent Secretary in the ministry of Energy for being denied an exploration licence.
IPC, whose address we could not locate, argued that the Energy PS Patrick Nyoike had colluded with TDC to “steal” results of a chemical analysis of a substance it had found in Turkana in 2005 and which it believes was crude oil.
The story goes way back to December 13, 2005 when IPC claimed to have discovered “a black substance smelling like oil” while drilling for water in Turkana and West Pokot.
They claimed that they submitted three samples to Mr Nyoike on December 27 for chemical analysis but were never given the results of the tests, even after pleading with President Kibaki several times.
The company finally decided to sue the Minister for Energy in January 2010 for abuse of secrets contained in the chemical analysis report.
IPC claimed the minister had expropriated the secrets to TDC, a charge the company denied. IPC was also denied the non-exclusive exploration permit it had requested. It lost the case.
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