which companies do have blocks / grounds, page-29

Some trivia on block tendering


PETROGUIN

Empresa Nacional de Pesquisa e Exploracao Petrolifera, E.P.
2007 3rd Round BID INVITATION

EXPECTED MINIMUM PARAMETERS
The parameters below represent the new Model Contract terms for Deep Water Guinea Bissau, and may be used as a guideline for the expected bidding parameters and scoping economics for projecting for the 2007 application
round for bids to acquire the rights to explore in the exploration offshore blocks, numbers 1,3,7A, 4B, 5B, 7B, 5C, 6C & 7C and all of the onshore.

They represent the terms that the Republic of Guinea Bissau considers to be competitively suited for these purposes under present market conditions for exploration in deepwater West Africa. They are set to enable & encourage commercial deepwater exploration and subsequent development, and are intended to form the basis for application by BID to obtain these block (s), but
Companies are encouraged to bid in a competitive sense based on their risk profiles and economics developed from their full interpretation of the seismic, gravity & magnetic geophysical data, the Basic and the Expanded geologic studies prepared for these purposes by independent consultants, and the SeaBed Coring/ Geochemical analysis acquired in late 2001 over all of the openDeepwater blocks.

The DEADLINE for 3rd round Bid Block APPLICATIONS is 30 April 2007.

The Bid Evaluation Committee will announce their assessments on 7 May 2007.

Parameters for applying for the Deepwater Blocks are:
1. Specify whether applicant wishes to be an Operator or a Non-Operator of block(s) applied for.
2. Tranches are established for parameters based on bathymetry, as follows:
a. T1 = > 1,000m water depth
b. T2 = 500 to 1,000 m water depth
c. T3 = <500 water depth
Or bid item if applicant desires consideration for tranches based on production rate.
3. Specify duration of license; recommended: five years, with optional two-year extension.
4. Specify % interest participation for applicant, partner(s), and for PetroGuin; recommended PetroGuin participation is 10%-carried, in the exploration phase to declaration of commerciality; Successful bidder(s)
or consortiums will hereinafter be referred to as "Contractor".

PetroGuin desires term allowing additional 5% back-in right (Not a carried interest) after declaration of commerciality.
5. Specify Bonuses Offered:
a. Signature bonus is a bid item please propose USD
b. commerciality declaration:
i. T1=US-----------------------Bid item amount
ii. T2=US---------------------- Bid item amount
iii. T3=US----------------------Bid item amount
c. Production Royalty
i. T1=5%
ii. T2=7%
iii. T3=10%
6. Work Program: recommended over five (5) years with options to proceed to the next stage based on Contractor option:
a. Stage 1 (12 months) = 2-D seismic 600 to 800 km per block
b. Stage 2 (18 months) = 3-D seismic 2500sq. km. per block
c. Stage 3 (18 months) = 1 Deepwater well
d. Stage 4 (12 months) = 1 Deepwater well testing a 2nd play type or objective.
e. Stage 5 = option period (24 months) 2 Deepwater wells.
7. CapEx Uplift: 145% of OPCOM approved tangible capitalized cost expended by Contractor on work program upon first production:
8. Cost Oil Splits: all oil after royalty payments go to Contractor until all costs and CapEx uplift (45% plus costs) recovered from production.
9. Profit Oil Split: upon recovery of all costs, as defined, all oil revenue
from production (except for oil required to cover operating costs and royalty is Profit Oil. Splits to be based on bathymetry tranches to Contractor/Petroguin, as follows:
a. T1 = 40% / 60%
b. T2 = 30% / 70%
c. T3 = 25% / 75%
10. Social Programs: This is a Bid item:
a. Immediate: -----------------------------propose your plan/cost
b. Post-Commerciality: propose upgrade of social program
11. Administrative Fee:
An annual administrative fee USD $75,000 Shallow & USD $150,000 Deep
12. Training Programs: recommended at US$150,000 / year to be escrow arrangement administered by Contractor; not a cash payment to PetroGuin; with training integrated with the Contractors internal programs and/or industry approved courses after commerciality increased.
13. Amortization rates: recommended at 50% per annum of revenue oil less royalty, not to exceed cost oil recovered; any balance carried over to next subsequent year; 65% rate for any residual not recovered after five
year initial contract term to be carried over into the two year option period.
14. Qualified Bidders: as announced in 1999, an applicant must have licensed the Basic Geologic Data Package, plus the DWGB spec data underlying the blocs before making application in order to be qualified to bid on a block.