British court to hear Malta oil ‘fraud’ case

The High Court in London will this week hear the chairman of Leni Gas & Oil (LGO), David Lenigas, who in 2013 launched legal proceedings against his former partner in an exploration licence off Malta, for fraudulent misinterpretation.

Lenigas agreed to sell his 10% stake in an offshore exploration zone off Malta to Mediterranean Oil & Gas in July 2012 for a nominal £1.

The British newspaper, The Sunday Times yesterday said that Lenigas would this week try to convince the High Court "that he was unfairly duped out of a sweetheart oil deal by his erstwhile partner."

In August of the same year, Mediterranean Oil & Gas struck a deal with Genel Energy, the company run by former BP boss Tony Hayward, to sell 75% of the rights to the same zone for about $25 million.

Lenigas is claiming that he was misled by Mediterranean Oil & Gas (MOG) at the time his company sold its 10% interest. These claims have been denied by MOG, who had instructed its legal advisors to address directly the matters raised by LGO and uphold and enforce its rights.

The Sunday Times said that legal experts are watching the court case closely "as it could influence the disclousures companies must make in the course of normal commercial negotiations." LGO could be awarded up to £2 million by the court.

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, acquired the interest in the Production Sharing Contract held by Phoenicia Energy Company Limited - a wholly owned subsidiary of Mediterranean Oil & Gas Plc - through his new company, the London listed Genel Energy Plc.

He will this week lead a keynote session on significant developments in the oil and gas industries in Northern Africa and the Eastern Mediterranean at the upcoming Economist Events' Business Roundtable with the Government of Malta.

In a recent interview with oilprice.com, Hayward commented on Genel Energy's recent oil exploration in Malta's Area 4. According to MOG, the 3D seismic data in Area 4 has a potential of 200 to 300 million barrels of oil to exploit.

On Genel Energy's attraction to Malta, Hayward said the area's geology presented a high-impact prospect to the company with the potential for field sizes of at least 250 bbl. Hayward also acknowledged that while expectations are dangerous in the oil and gas industry, Genel Energy was confident in Malta's geology and looks forward to drilling here.