Petroleum Africa
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Wednesday, June 12, 2013
The island nation of the Seychelles is putting exploration blocks on offer for oil and gas companies to bid on. The new licensing round comes as the government introduced new rules for bidders and completed a review of its laws regulating the petroleum sector.
The country has seen increased interest in its offshore acreage following the massive finds offshore Mozambique and Tanzania over the past couple of years, but has put any licensing on hold until its laws were reviewed properly.
“We want bona fide explorers to invest in Seychelles and drill wells to test our petroleum potential rather than speculate and sit on an area for their own commercial purposes,” president James Alix Michel, who is also in charge of the hydrocarbons portfolio in government, said in a statement.
Under the new licensing rules, once a company approaches the government on a first-come, first-served basis for an exploration area, if another company is interested it has up to 90 days to submit a bid for the same block. Once the 90-day bidding period expires, the government will select the company that has demonstrated the financial ability to conduct exploration and go into production if it strikes commercial quantities, state-run PetroSeychelles said. The firm also said among the significant features of the revised licensing system, the regulator will pay more attention to the details of each bidder’s plan and proposed time frame for exploring and developing an area.
Seychelles operates under concession contracts, whereby the company keeps exclusive rights to develop and produce the petroleum if it is commercial. Under the new licensing regulation, exploration companies will be required to pay 10% of petroleum revenues as a royalty, an increase of 5%.
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