me Posted August 14, 2007 Somali oil bill targets former concession-holders By Katie Nguyen NAIROBI (Reuters) - Oil majors who declared force majeure and quit Somalia 16 years ago will be given the chance to resume their activities under the anarchic country's proposed hydrocarbon law. According to a parliamentary bill obtained by Reuters, firms that held concessions before December 30, 1990, will be given the right to return to those areas under new production-sharing agreements. The new production deals will set out different financial terms, exploration periods and obligations as well as new block sizes. "A Prior Grant in the form of a concession entitling the Prior Contractor to conduct exclusive Petroleum Operations shall be convertible into a Production Sharing Agreement," the draft law says. Several Western oil majors -- Royal Dutch Shell, BP, ConocoPhillips, Chevron, ENI -- held Somali exploration concessions in the 1980s before leaving in 1991 when warlords toppled dictator Mohamed Siad Barre and the country descended into lawlessness. The 41-page draft law -- awaiting parliamentary debate -- gives previous concession holders a year from the time the law comes into effect to sign up for a production-sharing agreement. It was not immediately clear whether any of the Western oil majors would consider returning to a country which has become a byword for violence. The bill also nullifies any exploration deals struck after 1990 -- a clause that is likely to meet opposition from Somalia's northern regions of Somaliland and Puntland which have both signed separate agreements in the past five years. It may also affect a production-sharing agreement signed by President Abdullahi Yusuf and China's largest offshore oil and gas producer CNOOC Ltd., which was reported by the Financial Times last month. "Any right to conduct Petroleum Operations in Somalia granted after December 30, 1990 shall terminate and cease to be a binding obligation on the Government," the draft law says. NATIONAL OIL COMPANY The interim government, formed in late 2004, is keen to attract foreign partners to develop its nascent petroleum sector, seen as one of the final frontiers for untapped energy. Although the U.S. Energy Administration says Somalia has no proven oil reserves, geologists hope to find an extension of the crude-bearing deposits that hold nearly 4 billion barrels across the Gulf of Aden under Yemen. Analysts say the bill's recognition of previous concession holders is a deliberate move to encourage the return of well-established players and to dispel any doubts over the legal status of prior deals in the Horn of Africa country. A production-sharing agreement template says the government would receive 8 percent of revenues in cash on the first 25,000 barrels of oil per day if the price was $55 or more a barrel. On production in excess of 100,000 barrels of oil per day, it would receive 14 percent of revenues. Officials expect the draft law, approved by a council of ministers in February, to be debated in parliament shortly. If the legislation passes, it would give the go-ahead for the creation of a state-owned Somalia Petroleum Corporation -- to be 49 percent-owned by Indonesia's PT Medco Energi Internasional Tbk and Kuwait Energy Company. The foreign firms would fund the corporation's operations and pay all of its approved exploration and development costs. Somalia's state oil company would then have the power to exercise the government's right to participate in activities under production-sharing agreements for up to 30 percent, once commercial discovery has occurred. The draft law also gives a similar right to the government of each regional state in Somalia where petroleum activities may occur, with a participation right of up to 10 percent. (Additional reporting by Andrew Cawthorne) Source Quote Share this post Link to post Share on other sites
N.O.R.F Posted August 14, 2007 An interesting yet disturbing development. A production-sharing agreement template says the government would receive 8 percent of revenues in cash on the first 25,000 barrels of oil per day if the price was $55 or more a barrel. I think its safe to say oil prices will remain above $55/day. 8% of revenues on this would mean $110,000 per day in cash for the govnt. Good news for a cash strapped TFG but what about the rest of the revenues? Is this 8% all the govnt gets on the 25k barrels production? The new production deals will set out different financial terms, exploration periods and obligations as well as new block sizes. Who is over-seeing this? If the legislation passes, it would give the go-ahead for the creation of a state-owned Somalia Petroleum Corporation -- to be 49 percent-owned by Indonesia's PT Medco Energi Internasional Tbk and Kuwait Energy Company. 49% is way too much,,,,,, Quote Share this post Link to post Share on other sites
QabiilDiid Posted August 14, 2007 Tuesday, August 14, 2007 NEW YORK (Reuters) - Oil company Chevron Corp. has no plans to reenter Somalia in the near future, a company spokesman said on Tuesday. A draft hydrocarbon law obtained by Reuters would allow oil majors who declared force majeure and quit Somalia 16 years ago to resume their activities there. Several Western oil majors -- Royal Dutch Shell , BP , ConocoPhillips , Chevron, ENI -- held Somali exploration concessions in the 1980s before leaving in 1991 when warlords toppled dictator Mohamed Siad Barre and the country descended into lawlessness. (Reporting by Michael Erman) Source: Reuters, Aug 14, 2007 Quote Share this post Link to post Share on other sites
General Duke Posted August 14, 2007 Chevron is suing Range as its Somali reps. CNOOC has alr3eady signed a deal. People it will be the next admins who benefit from these oil deals. Quote Share this post Link to post Share on other sites
