Upstream Online
4 April 2008
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Last week, international co-ordinator Javier Garcia Lachica urged Rand Merchant Bank chief executive Michael Pfaff to clarify whether RMB Resources a UK subsidiary of the First Rand Group has given loans to Dublin-registered Island Oil&Gas, to help it pursue a recconnaisance contract with Moroccan state oil company ONHYM onshore the Sahrawi Arab Democratic Republic (SADR).

SADR, through its military arm Polisario, has maintained a ceasefire for several years under United Nations' auspices, amid diplomatic efforts to organise a referendum on the sovereignty.

Lachica said RMB's readiness to finance exploration "undermines the principles of international law."

In an open letter to Pfaff, Lachica asked RMB to "make sure that capital from RMB will not be used for any petroleum exploration purposes in occupied Western Sahara [and will] not provide loans or any other support to Island Oil&Gas or their partners for these specific purposes".

RMB declined comment but was said to have told the SADR its cash wuld not be used in Western Sahara.

Island, together with Rabat-registered San Leon and Jersey-registered GB Oil&Gas Ventures, renewed its reconnaissance licence for the Zag Basin in December for another 12 months.

San Leon is operator with 50%, alongside GB Oil&Gas on 30% and Island with 20%.

Lachica argued that, since Pretoria recognised the SADR government-in- exile, it would not want its banks to finance deals that undermined the territory's quest for sovereignty.

Island said it had reached a deal with RMB to extend its existing $24 million loan facility for another 60 days from the end of March, and that RMB would consider a further extension after that.