Here is the note, provided by stunjamie, a poster on the Investor's Hub board:
Nigeria, Sao Tome Agree PSC
294 words
18 November 2005
International Oil Daily
English
(c) 2005 Energy Intelligence Group Inc. All rights reserved.
The Joint Ministerial Council (JMC) that oversees the Nigeria-Sao Tome Joint Development Authority on Wednesday ratified a draft of the production sharing contract (PSC) for five offshore oil blocks awarded in May 2005.
The draft model PSC is thought to include revenue sharing of 80-20 in favor of the oil companies. The firms, in turn, are expected to pay a 5% royalty plus 50% in tax. Essentially, the PSC will be structured in the same way as the earlier Block 1 PSC, operated by Chevron.
The winners of the five blocks are now due to sign an agreement by the middle of December. Negotiations were previously expected to conclude in September (IOD Jun.27,p7).
The controversial second round awards were made in May after a five-month delay plagued by political wrangling between the two countries and allegations of corruption. The attorney general of Sao Tome launched an investigation in September. An earlier probe by Sao Tome's National Assembly into found that decisions had been made without supporting documentation or legal opinion, and lacked due process.
Sao Tome's President Fradique de Menezes was quoted on Wednesday as saying he too is under investigation. "No one escapes, not even the president," de Menezes told a local newspaper.
Earlier this month, Noble Energy became the second US upstream independent to pull out of a consortium planning to work in Block 4 in the JDZ, and was replaced by Addax Petroleum (IOD Nov.1,p4). In July, Devon Energy withdrew from Block 2. The firm claimed the small stake it was allocated was not big enough to warrant its participation, but is also said to have resented having to deal with so many block partners.
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