Quick buying and selling of offshore concessions a major red flag...should be wakeup call for all nations

Quick buying and selling of offshore concessions a major red flag…should be wakeup call for all nations – Oil Expert

Oct 12, 2020 News

– The Senegal gas blocks giveaway

Kaieteur News – As oil producing nations like Guyana embark on efforts to build the capacity to effectively manage its petroleum sector, particularly in the award of oil blocks, there are a few critical lessons it should pay attention to if it intends to not repeat the mistakes made by others.

Expert on Oil Sector Corruption, Alexandra Gillies

Aliou Sall, the brother of Senegal’s President

President of Senegal, Macky Sall

Controversial businessman, Frank Timis

In this regard, expert on oil sector corruption, Alexandra Gillies, opined that the massive giveaway of the gas blocks offshore Senegal holds crucial lessons for oil producing nations.
In one of her assessments published by the Natural Resource Governance Institute (NRGI), Gillies showed how Frank Timis, a Romanian-Australian businessman who has a well-known history of fraud, corruption, and misleading investors, gained the rights to two offshore concessions, Saint Louis and Cayar, and within weeks of acquiring them, sold them for billions of dollars.
Gillies, in her analysis, noted that Timis who has zero experience in oil and gas exploration, created a company called PetroTim in 2012 and registered it in the Cayman Islands.
After he used this shell company to acquire the blocks, he created another shell company two years later called Timis Corporation and hired the brother of the President, Aliou Sall, to run the show.
Less than two months after registering the new company and hiring the President’s brother, Timis Corp sold 60 percent of the shares to American oil company Kosmos in 2014 for over US$400M.
That same year, Kosmos found major natural gas reserves. The United Kingdom (UK) oil giant British Petroleum (BP) subsequently joined the partnership and acquired 30 percent of the blocks interest which saw Timis getting more than US$200M. In 2017, BP then bought out Timis Corporation for US$250M. That company held the remaining shares in the gas blocks. BP also agreed to pay Timis at least US$12B in royalties over a 40-year period. In total, Timis made approximately US$900M in cash within five years of acquiring the block and the 55 year-old is set for life with at least US$12B more to follow. In order to finish this money by the time he is a century, Timis would have to spend at least US$280M every year. Since acquiring the gas blocks, Timis had committed to pay exploration costs of US$48 million dollars but he only invested US$2M before flipping the assets.
When one takes the foregoing into consideration, Gillies said that nations should always increase scrutiny followed by an immediate investigation whenever this red flag is noticed. Gillies said it is a red flag that should never be ignored.

Map showing the two controversial gas blocks off the coast of Senegal.

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