State-owned oil company National Oil Company (NOC) of Libya is to investigate allegations that Canadian oil exploration and development company Verenex was improperly pre-qualified to bid for the Exploration and Production Sharing Agreement that it was awarded in 2005.
In a statement published on the Verenex website, a spokesperson said that the company had received two letters from NOC saying that it was under investigation.
“Verenex considers these allegations to be without merit and vigorously denies them,” the statement said.
“No specific improprieties or details of the allegations have been provided to Verenex.”
“The company observes that the allegations are being made more than four years after the award of exploration rights in Area 47 under a transparent bid process and coincident with a request for consent for the sale of the company,” it added.
The sale in question regards a proposed takeover of Verenex by the China National Petroleum Corporation International Ltd. (CNPCI). CNPCI has agreed to pay US$8.69 a share for the company.
Verenex stated that the takeover had been agreed by the NOC on condition of an approval bonus of US$40.6 million to be paid to the Libyan company. Verenex allege that despite agreeing to pay the bonus, consent has still not been given.
However, it is believed that the NOC wants either a higher bonus or, more likely, a lower cost price of Verenex so that it can activate a pre-emptive right to buy the company.
“Since the execution of the CNPCI Agreement on February 24, 2009, Verenex
has actively sought the NOC’s consent to the transaction,” the statement said.
”However, to date the NOC has continually failed or refused to provide such consent. The chairman of the NOC has repeatedly stated publicly (most recently on May 22, 2009) that the NOC intends to exercise a pre-emptive right to acquire Verenex on the same terms and conditions as offered under the CNPCI Agreement,” it added.
It is believed that the NOC is reluctant to lose any of the countries oil assets to other countries.
