- have limited financial exposure
- initially provide technical assistance
- receive a royalty on hydrocarbons produced from any new drilling in the country
- be entitled to a carried interest in any wells drilled by incoming companies
- have a prior right to explore in its own name anywhere in the country
The Agreement is part of North Korea's drive to develop an indigenous energy industry. Signing took place on 30 June 2004 in Pyongyang in the presence of the British Ambassador but was subject to certain closing conditions which have now been satisfactorily fulfilled.
DPRK has an existing petroleum industry and several wells have been drilled onshore and offshore over a 25 year period, resulting in limited discoveries of oil. Aminex believes that the country is highly prospective for new discoveries but lack of resources has so far restricted progress.
Under the terms of the Agreement, Aminex will initially provide technical assistance to the DPRK through assessing existing data, obtaining new data, assisting with drawing up a framework for licensing exploration areas and for marketing the country's potential to the international oil industry.
In return, Aminex will receive a royalty on hydrocarbons produced from new drilling anywhere in the DPRK, onshore or offshore, and be entitled to a carried working interest in any wells drilled by incoming companies.
Importantly, Aminex will have a prior right to explore in its own name, either alone or with international industry partners, anywhere in the territory covered by the Agreement.
The Agreement represents only limited financial exposure for Aminex at this stage with the option to expand the operation through exploration and development drilling under appropriate circumstances.
Brian Hall, Chief Executive of Aminex, said:
'This Agreement is the culmination of a long term effort. Aminex has been reviewing North Korea for several years and first visited the country in 2001. At present relations between North Korea and the outside world are strained but the important relationship with South Korea appears to be improving and commercial co-operation is on the increase. An expanding energy industry may possibly help to build bridges between DPRK and the outside world.'
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