The government of Rwanda and Vanoil, a Vancouver-based Canadian international oil and gas development company are in talks to resolve an exploration dispute that developed between the two parties.
According to a Vanoil press release, the dispute between the company and the government of Rwanda is related to the Company’s exploration and analysis of an oil and gas asset in Rwanda.
We are initiating “conciliation” discussions with the government of the Republic of Rwanda. Conciliation is the first-step in the commercial arbitration process agreed to by both Vanoil and the Rwanda government to resolve any commercial dispute,” reads the document in part.
Available information shows that Vanoil has been engaged for more than six years in an oil and gas exploration and evaluation program in the north-western part of Rwanda, better known as “East Kivu Graben Basin”.
Vanoil undertook these activities pursuant to a Technical Evaluation Agreement (TEA) with the Rwanda government.
According to Vanoil, under the TEA, it secured a “Right of First Option” to enter into a production-sharing contract (PSC) with the Rwandan government in relation to any promising oil discoveries identified in the East Kivu Graben Basin.
“Vanoil has spent in excess of $3 million on its exploration activities based on Rwanda’s commitment to conclude a binding PSC with the Company.”
In June 2013, after many months of negotiation for a PSC, the Rwandan government, without notice or justification, summarily terminated negotiations and, with that, terminated Vanoil’s exclusive rights to develop the East Kivu Graben Basin.
Vanoil has selected a lawyer to participate on the three-person conciliation panel. While Rwanda also selected its representative to the conciliation panel and it is expected that a third panelist will also be selected shortly by the parties.
Oil exploration in Rwanda began when the government entered into an agreement with Canadian firm, begin works in Lake Kivu, along the Rwanda-DRC border, which also falls in the Albertine Graben.
According to Rwanda government, a sedimentary basin was discovered under Lake Kivu with thickness of up to 3.5 kilometres. Experts are still analysing data from the 2-Dimentional seismic technology to determine whether the structure of the basin is capable of holding oil.
Using the 2-Dimentional seismic technology, acoustic waves were sent to the deep seabed of Lake Kivu, which is some 400km below.
Using this method, heavy explosives are used to produce sound waves which bounce back to produce an image of the lake’s subsurface. After analysis, the date is analysed to tell whether its geological structure has any oil reserves.
The next step will be to get a detailed 2D seismic with a detailed structure, after which the government will decide where to drill the oil.
Rwanda was encouraged to search for oil after other regional countries of Kenya and Uganda made key discoveries.
Rwanda is in the Great Rift Valley Basin just like Kenya and Uganda and we have a similar geological structure.
The fact that there are discoveries in Uganda and Kenya in areas with the same geological structure is reason enough to believe in Rwanda’s oil availability.