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Bowleven dispute a threat to Africa plans

SCOTTISH oil and gas company Bowleven is embroiled in a bitter dispute which could jeopardise its plan to develop oil and gas finds made off Cameroon, it has emerged.

EMBROIILED: Bowleven's injunction was lifted by a judge who said it 'would really serve very little purpose'.
EMBROIILED: Bowleven's injunction was lifted by a judge who said it 'would really serve very little purpose'.

Court papers reveal a partner of the Edinburgh-based company has raised doubts about Bowleven's ­ability to deliver a flagship scheme to start production off the West ­African country.

Bowleven obtained an injunction in the High Court in London to prevent the partner talking to ­Cameroon authorities ahead of a crunch meeting. This was then lifted by the judge concerned, who voiced a strongly worded criticism of Chief Tabetando, a director of Bowleven, for misrepresenting the effect of the injunction.

The dispute came to court ahead of a crucial few months for Bowleven, which has raised more than £300m in the last nine years but has still to produce oil or gas commercially.

In November Bowleven told investors it expected to make a decision by mid 2014 on whether to sanction the hefty investment required to bring fields on the Etinde permit onstream.

The company had expected to make the decision by the end of last year.

Directors said a further delay to the decision may have implications for the group's status as a going concern.

The company cannot make a final investment decision unless the Cameroon authorities approve its plans by issuing an Exploration Authorisation.

On 6 February, Bowleven said a proposal for an application for an authorisation had been jointly approved with its partner Cameroon Offshore Petroleum on 3 January. Bowleven said the application was submitted to the authorities for approval on 6 January.

Cameroon Offshore Petroleum (Camop) has a 25% stake in the Etinde Permit. However, on January 6 Bowleven's EurOil business obtained a High Court injunction preventing Camop communicating with SNH, the state-owned Cameroon oil business, and with the ­country's authorities about the companies' joint operations. The injunction, which followed an application to Mr Justice Males, did not prevent Camop attending meetings with the Cameroon authorities scheduled for 7 and 8 January.

On 14 January, however, the judge lifted the injunction.

In a judgement, he said: "It seems to me that a position has now been reached where an injunction would really serve very little purpose."

The judge added: "It is also clear that, in the past, both parties have been prepared to write to SNH in terms which have to some extent denigrated the other party to the JOA (Joint Operating Agreement).

"For the court to intervene at this stage, by restraining one party only from making any communication with SNH, would be striking the wrong balance."

Referring to evidence he had received, the judge noted: "It is clear from that evidence that the issues which have given rise to concern on the part of Camop are issues of some long standing, going back to at least July 2013. Those issues relate to the capability of EurOil to carry out its functions, as the Operator under the Joint Operating Agreement and the Contractor under the Production Sharing Contract; to the question whether the appropriate development strategy is to develop a single project encompassing both fertiliser and LNG plants, or whether it would be preferable to proceed in stages with a fertiliser plant, to be followed potentially at some later stage by an LNG project."

The judge added: " It is also clear that those concerns, even back in July 2013, were shared by SNH, at least to some extent."

In its results announcement in November, Bowleven said it was targeting first gas from Stage 1 of the Etinde project in 2016 after the fertiliser plant is expected to come onstream.

The judge noted that the meetings referred to in the injunction took place.

He criticised Chief Tabetando for comments he made at a meeting, held on an unspecified date.

"Chief Tabetando, who is the Executive Chairman of EurOil, stated that the fact that the High Court issued the injunction was conclusive proof that CAMOP was in breach of the Joint Operating Agreement. That, of course, is a clear misrepresentation of the position."

He added: " In my judgment it is completely unacceptable that the effect of the injunction should have been misrepresented to SNH in this way."

Bowleven will host a meeting for private shareholders in London on 27th February.

At the company's annual general meeting in December a private investor criticised board members for not buying more shares in the £13.3m placing completed by the oil and gas company in November.

Tim Kempster, asked: "Isn't it best to hoist a for sale sign and put us shareholders out of our misery."

Bowleven's chairman Ronnie Hannah told the meeting directors had all shown their commitment over time.

The placing was completed at 45p per share.

Bowleven raised £55m at 650p per share in October 2005.

Asked about the judge's comments a spokesman for Bowleven said the company would not comment on an ongoing legal matter.

In July Bowleven said the Cameroon authorities had indicated an early grant of an Exploitation Authorisation was a priority.

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