The Outlook

Kosmos EnergyThis is an excerpt about Kosmos Energy is from an article in our monthly Sahara Focus publication.

The government of the Saharawi Republic (the SADR) issued a communiqué on 16 August in response to the recently expressed plans of the Dallas-based Kosmos Energy to trade in securities in a secondary listing on the London Stock Exchange (LSE).

The communiqué said: ‘Any effort by Kosmos Energy to raise additional capital, including securities offerings and especially on an exchange which is, for the time being, subject to European law results in clear risks for the company and others financially interested in it. Kosmos Energy continues with seabed petroleum exploration in the coastal waters of occupied Western Sahara with an established basis for legal action against the company and its supporting enterprises.’

SADR’s official responsible for natural resources, Emhamed Khadad, noted that four senior level international and national courts have confirmed that Morocco has no right or title to the territory. ‘What this means’, said Khadad, ‘is that the rule of international law holds that the occupying state is unable to offer exploration licenses and, even less, hold out any rights to petroleum that could be recovered from the seabed.’

The Court of Justice of the European Union (CJEU) confirmed that Western Sahara is not a part of Morocco in a December 2016 judgment, and exclaimed that the kingdom can therefore not exercise treaty authority over the territory in respect of trade matters.

A June 2017 judgment of South Africa’s High Court, concerning a shipment of phosphate rock exported seized after export from Western Sahara, concluded that: ‘Morocco has no claim to sovereignty over Western Sahara … Furthermore, it acquired the territory by force [and] we conclude that howsoever Morocco’s presence in Western Sahara may be described, it does not exercise sovereignty over the territory’.

The 2017 and 2016 judgments follow one which the UK’s High Court confirmed in 2015, which ruled that territorial status of Western Sahara is not part of Morocco. Crucially, a securities listing on the LSE, and related activity, faces the risk of precedent in the UK and by parallel and separate proceedings, in the Court of Justice of the European Union.

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