S. African oil explorer seeks enforcement of $619 mln award against Congo

South African oil exploration company DigOil has asked a U.S. court to enforce a $619 million arbitration judgment against the Democratic Republic of Congo for failing to honour two production-sharing agreements, court documents show.

The Paris-based International Chamber of Commerce ordered Congo in November 2018 to compensate the company for failing to uphold agreements signed by the two parties in 2007 and 2008, a judgment the chamber’s appeals court upheld this January.

The U.S. lawsuit, filed on April 30, asks the U.S. District Court for the District of Columbia to order Congo to pay the $619.3 million plus interest. Congo has 60 days to respond to the summons or risks losing the judgement by default.

Congo’s justice minister did not respond to a request for comment on Wednesday. Congo previously argued before the arbitration court that then-President Joseph Kabila was within his “sovereign discretionary power” when he declined to ratify the accords with DigOil.

The government has given no indication it intends to pay the sum of $619.3 million, which represents nearly two-thirds of its current foreign reserve holdings and about 10% of its annual budget.

Congo signed up in 2013 to the New York Convention, a U.N. agreement that allows for the enforcement and recognition of arbitration awards within contracting states.

However, it is not clear what DigOil could do to compel Congo to comply with the award, even if it wins in U.S. court. The company declined to comment on the lawsuit.

The dispute between the two sides relates to four oil blocks. One, near the border with Uganda, was awarded in 2010 to subsidiaries of a company run by Israeli billionaire Dan Gertler, but it has never produced any oil. The other three are in Congo’s Central Basin.

Established in 2007, DigOil has interests in Central African Republic and Congo Republic, according to its website.

Congo, which is a significant producer of copper and cobalt, pumps just 25,000 barrels of oil per day from its western coast and has failed to develop any other oil discoveries in its centre and east.