Ganope is a holding company that is wholly owned by the Government of Egypt, and is in charge of all oil exploration and production activities in Upper Egypt (south of latitude 28 Deg. N., while another State owned company; Egyptian General Petroleum Corporation ("EGPC"), has the same role for areas to the north of such latitude). Although the Concession has already been awarded to QEL by Ganope, the Concession Agreement can not be executed by and between QEL, Ganope, and the Egyptian Ministry of Petroleum until; (i) it is approved by the Egyptian Parliament, and (ii) such approval is ratified by the relevant Presidential Decree. It is anticipated that both of the conditions shall be completed during the second half of 2004.
QEL is a subsidiary of the Corporation that is incorporated in the British Virgin Islands, and its share capital is owned as to eighty percent (80%) by the Corporation and twenty percent (20%) by Rampex Petroleum International CJSC of Cairo, Egypt.
The Concession is accompanied by 4,000 Km of 2D seismic (circa 1995), covering less than twenty percent (20%) of the above mentioned acreage. The preliminary evaluation made by the Corporation has concluded that the area is a part of a newly discovered Mesozoic rift system; of the same type and potential as those producing in Sudan, and in many other regions of Africa. Several prospects and leads have been identified through interpretation of the existing seismic data.
The Concession Agreement stipulates: (i) QEL is the Contractor and sole Operator of the Concession; (ii) during the eight (8) year exploration period, QEL must carry out an agreed work program with minimum obligation of eleven million U. S. Dollars (US$ 11,000,000.00) in capital expenditure; and (iii) QEL to relinquish twenty five percent (25%) of the Concession acreage upon each of the second and fifth anniversaries of the Concession Agreement.
QEL has agreed to retain the services of Rampex, including: (i) leasing of office premises, office equipments, furniture and fittings, and geophysical and reserve engineering professionals; (ii) provision of qualified human resources team; and (iii) continuation of the professional services of Mr. Ramzy El Adl, Managing Director of Rampex; as the Vice President of QEL and Country Manager of the Corporation in Egypt.
Commenting from Cairo, Mr. Michael Nugent, the President of the Corporation stated that; "this Concession marks the beginning of the Corporation's dynamic growth beyond its roots in the Republic of Colombia, while complementing the Corporation's continuing and diligent efforts in the Republic of Uzbekistan; and it inaugurates the Corporation's strategic entry into the Greater Middle East region. Given the size and geological attributes of the Concession, the Corporation is now firmly positioned to meet the high expectations of its shareholders in the coming years".
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