Irish oil firm now to conduct surveys in occupied territory

San Leon’s seismic surveys will be conducted in the northern parts of occupied Western Sahara from July 2011, in violation of international law. Placements from investor George Soros might have been crucial.
Published: 21.07 - 2011 02:32Printer version    
The Irish and UK oil firms San Leon and Longreach have announced that seismic studies will be conducted in Western Sahara from July 2011. The study will consist of 600 kilometer seismic studies on each of the Tarfaya and the Zag licences. Both blocks are mostly located in occupied Western Sahara, and the oil search takes place in violation of international law.

The contract is awarded to Novaseis, a newly established San Leon-owned seismic services firm. Novaseis, Warsaw based, is a 100% subsidiary of the Dutch company Island Oil and Gas B.V, the latter acquired by San Leon during its takeover of their Irish partner Island Oil and Gas last year.

“We have found an appropriate solution to the high costs quoted for carrying out our planned seismic acquisition programmes. [...] Novaseis will carry out its first operations in Morocco before returning to Poland, where we expect increased countrywide exploration activity to tighten availability of acquisition services and increase costs”, stated San Leon in their 2010 Final Audited report, published 29 June 2011.

San Leon expects Novaseis later to become a “standalone profit-making subsidiary that will primarily offer services to the San Leon Group as we develop our Polish assets quickly and provide services to third parties when there is spare capacity”, according to the report.

Pointing to Poland
It appears to be San Leon’s presence in Poland that contributed to the financing of this year's controversial Western Sahara exploration programme to begin with. The Irish firm holds rights in six licences in Poland, three of them located on a much mentioned Baltic Basin region in North Poland. This basin might be the reason why investor George Soros ended up on the ownership side of the firm that undertakes highly unethical oil exploration in occupied Western Sahara.

In 2010, the firms San Leon, Island and Longreach undertook a major restructuring of the group. At the same time, a hedge fund of the US multibillionaire George Soros caught interest in the geology of Poland, where the group had a stronghold.

And the interest in Poland could be well explained. According to a recent report by the Energy Information Administration of the U.S. Department of Energy, Poland has 5.3 trillion cubic meters of shale natural gas, equal to more than 300 years of the country’s annual gas consumption. This is the largest amount of shale gas for any European state in a study of 32 countries, according to the agency.

The Soros fund purchased shares in one after the other of the minor firms exploring the shale gas region in the northern parts of Poland. The Soros investments were done via Quantum Partners LP, a subsidiary of the hedge fund Soros Fund Management. During the autumn of 2010, Quantum made the following investments:

  • BNK Petroleum, 22% of the shares (“BNK said it will use proceeds from the private placement for its business, including work commitments on its European shale gas concessions”)
  • Realm Energy, 19,5% of the shares (“The net proceeds of the Private Placement will be used to continue the technical evaluation and acquisition of shale gas and shale oil plays throughout continental Europe and for general working capital purposes.”)
  • Aurelian Oil and Gas, 4,36%.

    From 6 January 2011, Quantum became the owner of 22,6 % of the shares of Western Sahara explorer San Leon. BNK, Realm and San Leon hold together interest in no less 8 licences in the Baltic Basin shale gas region.

    Urges San Leon’s withdrawal
    After Soros’ placement, San Leon had funding to establish its seismic subsidiary in Poland in March 2011. This new subsidiary is now contracted by the mother firm for work in occupied Western Sahara before the seismic studies of Baltic Basin will commence.

    The potential shale gas deposits of Poland could thus have become a key asset for the firm that wanted to continue its oil and gas exploration programmes in occupied Western Sahara.

    "We appeal to San Leon to demonstrate its commitment to international law and human rights by winding down its involvement in Western Sahara and undertaking not to renew activities until the dispute over Western Sahara is resolved", stated Western Sahara Resource Watch, Western Sahara Action Ireland and the Polish foundation Fundacja "Afryka Inaczej" in a letter to San Leon today.  

    “By collaborating with an illegal occupier in a Territory that is the subject of negotiations supported by the good offices of the UN Secretary-General, San Leon is acting illegally and irresponsibly, and is severely increasing the risk of further armed conflict, destabilisation and suffering in the Maghreb region”, the letter stated, underlining that Western Sahara is not part of Morocco, and that the local people has the right to self-determination. It also referred to a key UN legal opinion stating that further hydrocarbon exploration in Western Sahara would be in violation of international law.

    Read the complete letter here. A similar letter was sent to Longreach.

    From June 2011, the asset manager BlackRock followed Soros' trail, buying 12,1 percent of the San Leon shares. Altogether, the three San Leon executives Oisin Fanning, Phillip Thompson and Paul Sullivan today control 22,29 percent.

    Soros Fund Management LCC is a financial services company reported to have large investments in transportation, energy, retail, financial and other industries. According to the publisher Institutional Investor, Soros Fund Management had in 2011 $27.9 billion in assets under management.




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