First oil licensing round on

Survey for onshore prospects launched

The first oil and gas licensing round was launched on April 30. The Ministry of Energy and Water (MoEW) set the strategy of awarding contracts to international oil consortiums. It includes launching a consultation round on the ten maritime blocks delineated by the Petroleum Administration (PA), defining the blocks that will be opened for this round, and opening up petroleum agreements for consultation.

This will be followed by the formation of consortiums by the prequalified firms. Operators should have at least a 35 percent stake in the consortium while non-operators should have at least a ten percent one. Bidding will be open for up to five blocks in this round. Non-operators can participate in more than one consortium - but in separate blocks. There should be a minimum of three bids per block to allow negotiations with the MoEW. A consortium operator can be awarded two blocks per round.

Oil and gas companies will be giving comments on the petroleum agreement on June 1. The MoEW will then define the blocks open for bidding. Consortiums will start bidding for blocks from end-July until November. The evaluation of bid results will be done in January 2014. Negotiations and awarding of contracts are slated for March of the same year.

The MoEW is also conducting onshore oil and gas surveys which will be completed in September and then analyzed. The MoEW is working on a taxation package for income from the oil and gas sector.

The proposed exploration and production agreements suggest giving winning consortiums a period of 25 years for the exploitation of hydrocarbons, with the possibility of a five-year extension.