Photo Credit: Twinza Oil Limited
Following negotiations last week between the State and developer Twinza Oil Ltd, Pasca A in the Gulf is likely to get underway shortly.
Petrol Minister Kerenga Kua characterized the agreement between the State Negotiating Team (SNT) and Twinza as "by far the greatest" in terms of developing the country's petroleum resources.
“We delivered an agreement within the petroleum space, which is a new precedent from the existing projects,” he said.
The project is located 95 kilometres south of Gulf and is 100 meters below ground.
The reserves totalled 0.4 billion cubic feet, according to Kua.
“This project throughout its life will give us a total benefits package of 55 per cent, calculated on what financial modellers and economists called as nominal cash flow basis,” he said.
“The project’s lifespan will be about 12 years.”
The 55 per cent was calculated using a US$50 (K171.47) per barrel oil price, according to Kua.
According to the Oil and Gas Act, 55 per cent is made up of a 2% royalty (1998).
Because the resource is offshore, there is no identifiable landowner.
The Gulf provincial government will get the benefits.
“One thing about the 2 per cent royalty is that, unlike existing projects, it’s the net after other deductions, that landowners are given the remaining or nothing at all in a year,” Kua said.
“This won’t happen in this project.
“This 2 per cent will be from the gross production, not net of deductions.”
Other benefits include:
- 5% production levy from gross revenue;
- 2% development levy on gross revenue;
- 15% additional profit tax at 15 per cent accumulated rate;
- 5%LPG for domestic market obligation; and,
- 30% corporate tax.
The project's front end engineering design (Feed) should commence in the third quarter of this year, according to Twinza national manager Roppe Uyassi.
“Final investment decision (FID) should be made in the fourth quarter of 2022 with the first production planned for the third quarter of 2025,” he said.
Reference:
Mauludu, Shirley. The National (14 July 2021). “Pasca A starting soon after talks”.
