Ganope offers new seven blocks

Ganoub El Wadi Petroleum Holding Company (Ganope) invites the qualified Petroleum Exploration Companies to participate in the INTERNATIONAL BID ROUND 2010 to explore/exploit for Gas and Crude Oil under the Production Sharing Agreement (PSA) Egypt model 2010.

The international 2010 Bid Round 1 includes ( 7 ) Exploration Blocks in  the Eastern Desert And South Of Western Desert  as shown in the attached map.
Interested companies can purchase Data Package and/or review the hydrocarbon potential of 2010 Bid Round 1 blocks upon prior request and according to the determined fees.
Bid Round Closing Date will be: 20th December, 2010 before 12 :00 clock noon (Cairo Local Time).

Ganoub El Wadi Petroleum Holding Company
1- Procedures
Bidders shall submit their offers by the closing date in two sealed envelopes as follows:
ENVELOPE (1) entitled “Qualifications” and should contain:
1. A preliminary bond in amount of US$ 50.000 to be submitted to Ganope by irrevocable bank letter of Guarantee or cheque confirmed by First class Egyptian bank and valid for at least Six months from the bid round closing date. Such bond should be returned by Ganope to the unsuccessful bidders upon Ganope  notification.within fifteen (15) days from sending Ganope awarding notification to the successful bidder , the above mentioned us$ 50.000 guarantee shall be increased up to an amount equal to 10 % of the financial obligation of the initial exploration phase as specified in the offer .

2. Previous experience in petroleum exploration and production and activities of the company all over the world including development projects, reserves and latest used technology supplemented by the company’s annual report .

3. Article of Incorporation of the company with all supported document that proves its legal existence,
registration, as well as its shareholders, partners and their nationalities.
All mentioned above documents should be notarized, authenticated and legalized by
the competent authorities and the Egyptian embassy or the consulate general of the A.R.E  in the contractor’s country (ies)of origin and the ministry of foreign affairs in Egypt.

4. Recent annual report and / or official financial reports proving the financial strength of the bidder’s company(ies)
ENVELOPE (2) entitled “Commercials” and shall contain:
Commercial Parameters.
Envelope (2) “Commercials” will not be opened unless envelope (1) “Qualifications” was found fulfilling all required documents and the bidder is technically accepted.Those two sealed envelopes shall be submitted and hand delivered separately at the same time, and the first envelope shall be marked by qualifications, the second shall be marked commercial.
The two envelopes should be Titled (Confidential) and addressed to:

2-THE EGYPTIAN PR ODUCTION SHARING MODEL TERMS
1- TYPE OF CONTRACT “PSA”:
The contract shall be a Production Sharing Agreement model .contractor undertakes all the risks to explore and develop both oil and gas.

2- ASSIGNMENTS
CONTRACTOR may assign to a qualified contractor, in whole or in part, any of its rights, privileges, duties or obligations under this Agreement either directly or indirectly with the prior written consent of the GOVERNMENT, and in all cases priority shall be given to GANOPE if it so desired to obtain the interest intended to be assigned (assignment to affiliated companies is excluded).

3- VALUATION OF GAS :
The Cost Recovery and Production Shares of Gas, which is disposed of for local market, according to a Gas Sales Agreement between GANOPE and CONTRACTOR (as sellers) and GANOPE (as buyer) entered into pursuant to Article VII(e) shall be valued, delivered to and purchased at a price, which should be agreed upon between GANOPE and CONTRACTOR before the final signature of the relating development lease (s).

4- DISPOSITION OF CRUDE OIL AND GAS:
Priority shall be given to satisfy the A.R.E. local market needs for both crude oil and gas, Ganope shall have the right to buy contractor’s share of both crude oil and gas.
In case quantity of crude oil / gas isn’t required for the local market, the contractor may have the right to dispose its remaining production share the way it prefers after having the A.R.E. competent authorities approval.

5- Royalty & INCOME TAXES:
Ganope shall bear and pay out of its share, on behalf of the contractor:
a- royalty
b- The applicable Egyptian income tax.

6- CONTRACT PERIOD : ( COMPETITIVE )
The duration of the exploration period shall be specified in the offer and subdivided into two phases.
Total exploration period should not exceed ( …… ) years .the duration of any development lease shall be twenty (20) years from the date of the commercial oil discovery (in case of oil development lease) or
from first delivery of gas (in case of gas development lease).
This period may be extended up to (5) years “five years extension” upon contractor’s request and his submission of a complementary development or production plan to Ganope and subject to The Government’s approval.

7- RELINQUISHMENT : ( COMPETITIVE)
At the end of the first exploration phase , the contractor shall relinquish a minimum of ……% of the original exploration area , at the end of the second phase , the contractor
shall relinquish the remaining area except that have been converted into development leases.

8- MINIMUM WORK AND FINANCIAL OBLIGATIONS: (COMPETITIVE)
The phase, companies shall bid the minimum exploration program (seismic and exploratory wells) and its expected relevant financial commitments.
Any technical obligation and financial expenditure in excess of the minimum obligations during the first exploration phase shall be subtracted to the second exploration phase and offset against the minimum technical and financial commitment for the second phase.
A letter of guarantee for the minimum financial commitment of the first exploration phase should be submitted to Ganope by the contractor within certain period before final signature date of the contract and uponGanope notification.
A similar letter of guarantee is required if the Contractor is elected to enter the subsequent phase.

9- COST RECOVERY. ( COMPETITIVE )
Contractor recovers its cost out of ……percent (… %) of the total production.
Amortization of each exploration and development expenditures shall be recovered within a   minimum of ( … ) years (competitive, not less than (….) years).

10- EXCESS COST RECOVERY . ( COMPETITIVE )
Shall vary between profit share and 100% to Ganope.

11- PRODUCTION SHARING SPLIT : (COMPETITIVE )
The remaining percentage of petroleum after deducting cost recovery percentage shall be divided between Ganope and contractor.

12- BONUSES : ( NON RECOVERABLE)
A – SIGNATURE BONUS : ( COMPETITIVE)
transferred to Ganope account before the final signature date of the concession agreement.
B – PRODUCTION BONUS : ( COMPETITIVE)
Due to the following production rates:
Start production ……………………… US$.
Cumulative production 2 million barrel (or equivalent ) ………… US$.
Cumulative production 4 million barrel (or equivalent ) ………… US$.
Cumulative production 8 million barrel (or equivalent )………… US$.
C-FIVE YEARS EXTENSION BONUS of development lease:(COMPETITIVE)
Due upon the approval of Ganope and The Government on contractor’s request .
D – TRAINING BONUS : ( COMPETITIVE )
Minimum training bonus shall be US$ ……… at the beginning of any financial year   to cover the training of Ganope employees.
E – ASSIGNMENT BONUS :
Contractor shall pay to Ganope ,one day prior the government approval (10%) from   the total assignment deal value, This assignment bonus should not be less than ten percent  (10%) of the total financial obligation of the CONTRACTOR during the exploration phase  in which assignment request was accepted by Ganope. (except assignment to an affiliated  company).
F – DEVELOPMENT LEASE BONUS:
(COMPETITIVE )
Firstdevelopment lease US$.
Every development lease after the first US$.

13- DISPOSITION OF CRUDE OIL AND GAS:
Priority shall be given to satisfy the A.R.E. local market needs for both crude oil and gas, Ganope shall have the right to buy contractor’s share of both crude oil and gas.
In case quantity of crude oil / gas isn’t required for the local market, the contractor may have the right to dispose its remaining production share the way it prefers after having the A.R.E. competent authorities approval.

14- MANAGEMENT OF OPERATIONS :
During the exploration period an exploration advisory committee consisting of an equal number of representatives from contractor and Ganope, shall discuss and approve the contractor proposed annual work program and budget for each budget year .
During the development of any discovery, Ganope and contractor shall meet and agree on the joint venture company that will take place to conduct the operations. Such joint venture company will be approved by the minister of petroleum.

15- GENERAL CONDITIONS:
1- Once bidders submit their offers, they shall abide with  the terms and conditions of this bid round,   submitted offers shall  be   formatted according to the relevant Egyptian model agreement.
2- Ganope shall have the right to reject any offer without giving reasons.
3- Bidders should review and purchase the data for the block(s) they would like to apply for.
Offer (s) shall be disregarded if:
It includes any area(s)  not specified in Ganope international bid round 2010 .
The bidders haven’t reviewed or purchased the data relevant to the block(s) they applied for.
Conditioned or related to any other concession agreement in Egypt that were granted to   the bidder.
Ganope shall liquidate without any legal procedure the guarantee amount, in the following cases :
a) The bidder withdrew before the announcement of the bid results.
b) The successful bidder failed to increase the guarantee amount of US$ 50.000 up to the  amount of 10% of the financial obligation of the initial exploration phase as specified in the offer.

Ganope shall liquidate the 10% bond, if the successful bidder withdrew or failed to deliver to Ganope the necessary documents  and / or commitment required before the final signature date which will be determined by Ganope.

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