The exploration period for the PSC is for six years and can b extended for another four years. If commercial hydrocarbons are discovered, the contract will be for 30 years.
Oonce on production, BP MIGAS is entitled to first take and receive a quantity of Petroleum of 10% of the Petroleum Production of each year.
Upon the signing the PSC, Ranhill is required to pay a signature bonus of US $4 million to BP Migas and provide a performance bond for the value of the seismic survey, in the sum of US $17 million The period of the performance bond is for 3 years and the value can be reduced proportionally with the approval of BP MIGAS as work is performed.
Ranhill is required to perform a 2D seismic survey and drill one exploratory well in the first year. During the second year Ranhill will be required to perform a G&G study, 3D seismic survey and drill a second exploratory well. During the third year the company will be required to perform another G&G study and drill a third exploration well. The total firm financial commitment for Ranhill is US $34 million during the first three years of the project, inclusive of the signature bonus.
There are sufficient existing prospects to facilitate exploration drilling in the fourth quarter of 2007 in accordance with the PSC work program commitment.
The exploration potential can be considered low to medium risk and there is potential to find oil and gas since there are existing discoveries from wells drilled by previous operators in the contract area. The previous contract area was relinquished by these operators due to the absence of a local domestic gas market and because the discoveries were non commercial at previous oil and gas prices.
In addition, there are existing oil and gas pipeline infrastructure in the areas which enhances the economics of developing small and marginal oil and gas fields.
Most Popular Articles
From the Career Center
Jobs that may interest you