Update: Zenith Energy (LSE: ZEN)

We reccomended the stock on the 1st December 2025, at £0.04. Price as of today if £0.099, a 147% gain in 134 days, or a 1,080% CAGR.

Before we get into it, if you’re looking for information on the case (all three of them, technically), it can be found here:

Zenith Energy (LSE: ZEN) released an RNS titled ‘Tunisia recognises ownership of crude oil’

It’s pretty self-explanatory, obviously, but we should emphasise how this strengthens Zenith’s ICSID case

So, Tunisia has now formally recognised that Zenith’s Subsidiary, EPT, owned the Robbana and El Bibane production concessions, and have confirmed that oil remaining unsold due to their obstructions prevented EPT from operating fairly. Robanna has, as of the same RNS, seen ‘extensive vandalism and theft’, rendering it non-operational for at least the next year (how they came to that figure is unclear)

Just to remind you, in short, Zenith’s whole case revolves around other concessions and not being able to develop those concessions / sell produced oil.

Tunisia’s recognition that Zenith’s concessions have been obstructed is a meaningful admittance in two ways:

1. It shows their procilivity to obstruct other concessesions / obstruct foreign operators,

2. Consequentially of point 1, the tribunal will notice the same, and increases the odds of monetary damages being awarded (opportunity cost is more recognisable when the Respondent says they gave similar treatment as they’re accused of to the actual claimant)

So not-so-long story, even shorter: Tunisia admit concession obstructions, strengthening Zenith’s case

Addressing the elephant in the room: how exactly did Tunisia give formal recognition?

While the recognition boosts the odds of a monetary award of whatever quantity, the RNS doesn’t specify exactly how this is done. While it doesn’t change my verdict,we have no formal confirmation of Tunisia’s recognition. Of course, you shouldn’t expect Zenith to release communications with Tunisia, but more detail on the method of communications would go a long way for investors. It could also, however, be that they simply can’t release it for legal reasons. It’s not a big deal, but it’s a question a few have asked me.

What this indicates about Tunisia’s tactic

This recognition is eerily close to the start of the ICSID hearing, which starts in six days. Considering that Tunisia likely could’ve done this a month or two earlier, leaving it this close to the hearing is hardly deliberate.

Considering it doesn’t strengthen their case, you have to question their incentives here. Its clear their recognition, at the very least, doesn’t boost their odds of avoiding coughing up for Zenith, which only leaves you with one option:

Their focus is on the validity of the operations as opposed to monetary opportunity cost accrued by Zenith, and so they are going to try to avoid paying damages, and give Zenith their full concessions back, allowing them to conduct their operation freely.

Now, while this makes sense economically for Tunisia, there’s an obvious pitfall for Zenith: they still accrued opportunity cost - they still need to be compensated for revenues lost / time spent in arbitration. They are (arguably) years behind where they would be bar Tunisia’s obstructions, and so they need to be compensated for that opportunity cost. For that reason, it’s not in Zenith’s full economic incentive to forego claiming monetary damages (or at least trying to - that’s all you can do). This is further backed up by Andrea Cattaneo’s (CEO) comments: ‘Zenith claimant companies remain fully committed to pursuing... and that full compensation is obtained’. The use of the word ‘compensation’ suggests they favor a monetary award.