Cynergi sign sponsorship with Depiro Basketball Club
Shireburn Software expands SkyParks offices
Legal war erupts over Malta oil as eco-disaster chief executive goes for US$30 million deal
Update 2 | Leni Gas & Oil seeks legal advice after being left “surprised” by Mediterranean Oil & Gas (MOG)’s announcement of a farm-out deal with disgraced BP CEO Tony Hayward's Genel Energy for Area 4 licence in Malta
24 August 2012, 12:00am
The Maltese government still has to approve the deal, and it remains unknown so far if resources minister George Pullicino has met Hayward and discussed issues related to the deal.
But in the wake of statements made this week by the Malta Resources Authority which said that it was in "regular contact" with Mediterranean Oil and Gas Plc about its intentions to 'farm out' Are 4 offshore Malta, it remains unclear if the MRA or government ever knew with whom MOG was in talks with.
Leni goes to war
Leni Gas & Oil has meanwhile announced this morning that it is seeking legal advice after reportedly being left "surprised" by Mediterranean Oil & Gas (MOG)'s announcement of a farm-out deal with Genel Energy yesterday.
The London-listed junior has called in the lawyers after Genel agreed to take a 75% stake in MOG's erstwhile 100%-owned Area 4 licence in Malta.
Leni used to be a 10% holder of the petroleum sharing contract which includes four contiguous licence blocks.
However, earlier this month MOG took over that stake, paying Leni just US$1 for the interest and assuming liability for the latter's residual costs of US$19,050 which are associated with a 3D seismic survey over the area last year.
Yesterday, however, Genel Energy took over three quarters of the licence for an initial payment of US$10 million.
The Tony Hayward-led company will also take a 100% carry on the first and second exploration wells to be drilled, capped at US$30 million.
Phoenician Energy, the MOG subsidiary which actually holds the licence, will remain as operator until after the first well is drilled, after which Genel will have the option to assume operatorship.
Leni chief executive Neil Ritson said on 1 August that the company had decided to divest its interest in the PSC after carrying out its own technical assessment of the project which it considered to be non-core and non-strategic to its future operations.
"This divestment will allow us to avoid any further expenditure on Malta and to focus our management and cash resources on our core business of production growth in Trinidad," Ritson said at the time.
However, the London-based company has clearly been irked by the sudden sell-on to Genel and the relatively large amounts of cash involved compared to Leni's divestment gains.
"The board of (Leni) notes the contents of the (MOG) press release yesterday concerning their intended farm-out of the Area 4 PSC in Malta to Genel Energy," the company wrote in a brief bourse announcement on Friday.
"(Leni) is surprised by the content of the announcement and is seeking immediate advice from the company's litigation lawyers, Mishcon de Reya. "A further release will be made in due course."
Shares in both Leni and MOG dropped around 3.5% each in early trading this morning.
Hayward, who spent his entire career at BP, until the Deepwater Horizon accident in the Gulf of Mexico which cost 11 lives in 2010, wiped tens of billions off the value of the business and brought his tenure at the helm of BP to an abrupt end.
Hot on the heels of a deal with Tony Buckingham's Heritage Oil in Kurdistan this week - which incidentally also holds a licence from the Maltese government for offshore exploration - Hayward yesterday completed a US30 million deal which will fund Mediterranean Oil & Gas's two exploration wells in Malta.
Investec reiterated its buy recommendation for Genel, up 11.5p to 710.75p on FTSE, but adjusted its target price to 1104p.
For Mediterranean Oil & Gas's chief executive Bill Higgs the deal is a "welcome reward" for his hard work since he joined in January.
Higgs, who was at Chevron for 30 years and oversaw the construction of one of the largest man-made structures in the world, the BBLT oil well in Angola, was drafted after a tricky time at Mediterranean. The oil and gas firm was forced to refinance last year when an Italian offshore drilling ban led to near-disaster.
In an altogether better position now, Mediterranean jumped 16%, up 1.9p to 13.38p on the financial markets yesterday.
Hayward meanwhile, is entirely focused on the Genel Energy business which he bought with financier Nat Rothschild through their Vallares investment vehicle in 2011.
Genel is a relatively small, but successful, Turkish-based exploration and production company with assets concentrated in the geologically exciting but politically sensitive Kurdish market.
According to The Guardian, Genel has also been run, by a colourful and controversial boss, identified as Mehmet Sepil - who was fined €1m for insider dealing by the UK'S Financial Services Authority in 2009 - and partly owned by another Turkish businessman, Mehmet Emin Karamehmet, who is currently appealing against an 11-year jail sentence for embezzlement.
The Turkish businessman - who allegedly made close to €500,000 from the illegal dealings - told the London's FSA that he had made a mistake and had not intended to deceive anyone. His reputation has undoubtedly been tarnished, but Vallares's coterie of international investors, like Hayward, seems largely unmoved.
"Genel is in prime position to exploit its advantageous position in the northern Iraq oil fields, Hayward, with the whole world map to play with, has chosen to get back into the oil business with "risky" production rights that are still disputed by Baghdad," The Guardian said.
After the Deepwater disaster it was not certain how the City would view Hayward and his request for at least GBP1bn of financial backing - even when he teamed up with a high-achieving member of the Rothschild family.
"It's an interesting thing to ask people for money. They say 'what are you going to do with it?' and you just say trust me. We were obviously very successful."
Hayward admits Libya, Egypt and other traditional oil and gas provinces in North Africa and the Middle East are in his sights. Malta has just become one of them.
New agency launched to attract educational institu...
Court & Police
Appeals court sentences pregnant woman two months ...
Court & Police
Anonymous letter accusing CPD personnel of fraud d...