I was going to say "Finally a thread with some insightful, constructive and realistic comment. Cheers to everyone" until the echo of GW's conjecture resounded. IF you truly think Ophir wouldn't exercise an option to expand their acreage, given all conditions are met, YOU ARE KIDDING YOURSELF. And if they walk because they didnt meet all conditions surrounding Kora, it will have NO EFFECT what so ever on the license extension because Karim is entirely AWARE of these.
Anyway to the point of my post, thought I'd just point out RE:'In addition, as recent as Aug 2011, APetroleum continue to list (in their presentations) FAR's Senegalese tenements as under "application".'
The licenses offshore Senegal are VERY VERY confusing but I can assure you AP does not have our blocks under application anymore.
In the 2007 Annual they look to be one massive block called the Sangomar-Rufisque offshore licence but in 2003 they were 3 seperate blocks known as Rufisque and Sangomar and Sangomar Deep. In an announcement in Jan 2008 it was referred to as Sangomar Shallow and Deep-Rufisque Shallow and in the ministerial extension in November when FAR became operator they became once again became Rufisque and Sangomar and Sangomar Deep but there was no mention of size change or a map. To make things more confusing, just look at the maps in the first diagram below with all the different names.... DOGS BREAKFAST. Also look at the boundary with AGC Profound. What is going on there?
In all this stuffing around trying to get to the bottom of the current official names of our blocks, I managed to find the Petroleum Code of Senegal. I found what I think could at least be half the reason why Hunt walked and not just because of a change in senior management. AND why the decree is taking so long
"Mandatory surrender (Article 6 of the Model Agreement) Percentages of the Contractual Area to be relinquished at the end of the initial period and at the end of the first renewal are subject to negotiation, taking into account the size of the permit and the work program."
Basically a use or lose clause, I now believe it was always the intention of the ministry to reduce the area of the blocks to centre more around work areas to free up exploration area for companies willing to focus on these. BUT the block/s were in the 2nd phase, ie the First renewal period as they had already moved from the "initial period". So technically the license size should not have been allowed to change until entering into the Second renewal period which is what we're doing now. Which may have pissed Hunt off quite a bit considering they would have preferred to drill a deepwater well and recalibrate seismic and geological models before deciding whether to expand the work area. If this is correct, this would only add weight to the incompetence of the energy minister at the time, delaying oil exploration by years on top of the electricity debacle. Want something done right, do it yourself, and failing that an obedient son will suffice.
At present we are legally entitled to our work program area (Sangomar and Sangomar Deep as referred to in the second diagram) and with the area already reduced, I dont believe there is scope to reduce it further by changing the Rufisque boundary because there would be no area at all to expand 3D seismic.
"III EXPLORATION AND PRODUCTION SHARING AGREEMENT Duration of the Contract (Article 5 of the Model Agreement) - an initial exploration period for a duration not to exceed four (4) years; - two renewals for a duration not to exceed three (3) years each subject to satisfactory completion of the work and expenditure, obligations of the previous period. If necessary, the term of a contractual area shall be extended for the completion of the appraisal program of a discovery" The decision to apply for a 3 year extension as opposed to a 2 year when entering into the Second Renewal period may have been to remove the risk of a repeat of events."
Anyway, in my opinion a complete overhaul is required. 2 or 3 year extension needs to be settled - Pres Wade is a control freak, similar to KRudd, and uses Karim to extend his control. Karim never talked on TV until this year! 3rd or so occasion he said Senegal would become an oil producer within 3-5 years on the 22/7/2011, coincidentally close to what would have been TD of Kora and he would have been the first to find out. I assume Ophir would have said something along the lines of we didn't find the elephant but we're not giving up. Hence not 2-3 years.
Gives me a headache thinking of all the complexities with vested interests and self interests, and those caused by the overlapping AH structure. No wonder it's taken so LONG. But surely considering recent events the renewal cannot be more than a month or 2 away now......
With all this fiddling around I thought I'd try to superimpose the AH structure on our blocks in the 2nd diagram; but after abysmally failing (or so it seemed) doing it by hand in paint, I tried to resize it using percentage change with a constant aspect ratio and it STILL didnt fit. So realising that our "new" areas were clearly drawn on in microsoft paint (botched lines and legend), it appears that whoever did it stuffed the aspect ratio by about 15% from the original license map which I've taken from the 2007 annual report, essentially our blocks are fatter and shorter. Is this an issue? Well for me I prefer to be precise.
FAR Price at posting:
3.2¢ Sentiment: Buy Disclosure: Held
(20min delay)