Revocation of PSAs Could Make or Break UpstreamJune 2012 | Industry News
BMI View: Declarations made by the Democratic Republic of Congo's oil and gas minister that the government might revoke two oil blocks linked to a well-connected Israeli businessman could send a positive signal to investors. Indeed, it could signal that the authorities are no longer willing to get involved with intermediaries that have no prior experience in the sector and which are simply willing to use their connections to acquire valuable assets at a cheap price before re-selling them at a steep premium. However, without a widespread crackdown on such practices, doubts will remain about the government's intentions and investors would remain deterred by the country's arbitrary business environment, thus suggesting a worrying outlook for the nation's future oil output.
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