Juicier target CNE or FAR, page-150

Szaba: u need to understand first & foremost what classifies an Exploration Permit of thousand odd acres in shallow & Deepwaters ? (I dont know why there's confusion about something so trivial !!)

Here's how it works.

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Once a permit is awarded to a entity or JV, they are given x number of years to study the area, shoot 3D & identify prospects/leads b4 maturing them to drillable status. If the well finds commercial HC's then step-2 kicks in ie appraisal & then development. If no commercial HC's r found, then one tends to drop the block. (There's basically a 'decision tree' at the back of such Simple statements).

As part of the tenure terms, the JV pays $xx/acre monthly rent to the govt.

After a set duration (i.e, years), certain number of sub-blocks in the permit have to be relinquished & a core area where drilling/discovery has occured, is retained. In Oz we have the 'use it or lose it' policy.

So that comment at MSGBC is simply referring to relinquishment of sub-blocks from existing blocks in an Operator's permit & then awarded to others to encourage more activity in the region.

The relinquished area is then re-packaged in a Dataroom with new PSC terms+3D seis+well datasets+WL logs & then awarded in a new Bidding round to Interested Parties. And so it continues over the years.

It is Standard practice in the sector, also known as 'recycling of old tenement grounds' as it simply keeps the Monthly Rent (in USD/acre) coming into the local Govt's coffers.

Unlike Ghana, Senegal's DW permits do not have a Royalty clause on Produced oil, so the locals wont see a dime for now, other then the 'monthly rent' and any "performace bond/bonus'.

So basically besides the actual Permit, the PSC terms r the key attraction for a JV, ie Tenure (ie 25+10 Years), Low Tax rate (25%), 75% Cost recovery to a JV & profit sharing based on daily BOPD's.

As for the 'tender' that is Part-2. Simple explanation to that...

Once a JV makes its decision to exploit an Oilfield (post commerciality, pre-FEED, FID etc etc), they run a tender process to identify different sub-contractors to participate in the Field's Development, i.e, Drilling contractors, Sub-sea equipment provider, Pipeline Operator, FPSO provider, Topside/platform provider etc etc.

This is what the Minister was trying to say & that message got hopelessly lost in translation !!

By introducing changes to their existing law or a New code, they can atleast crack the whip & get the wheels in motion by awarding Newer permits or just b stuck with the current 6-7 permits & earn some Revenue, other then monthly rent from the existing exploration permit holders.

In an Ideal World scenario, the govt runs an Online Information System, where detailed maps, seismics reports & Info is kept for each exploration block, i.e well coordinates per Permit, well completion reports, geophysical Logs, DST test results, palynology reports, core reports, production reports etc. Hopefully one day Senegal will have all that in 1 place.

That's the long & short of it.