4 th TANZANIA LICENSING ROUND FISCAL TERMS, MODEL PRODUCTION SHARING AGREEMENT-2013 AND BIDDING INSTRUCTIONS 4 TH LICENCING ROUND Kelvin Komba Senior Principal Geophysicist TANZANIA PETROLEUM DEVELOPMENT CORPORATION 25 th OCTOBER 2013
PRESENTATION OUTLINE Before MPSA 2013 Fiscal Terms Terms in the MPSA 2013 Bidding Instructions Conclusion
Before MPSA 2013 MPSA 2008-todate MPSA 2004 MPSA 1995 MPSA 1989 CONTRACTUAL ARRANGEMENT PEPA 1980 CONCESSION ARRANGEMENT
TO MPSA 2013 Has attractive and competitive terms Increase of prospectivity in Tanzania MPSA 2013 Concept of a win-win situation Increase of regional exploration activities MPSA 2008-todate MPSA 2004-2008 MPSA 1995-2004 MPSA 1989 8 14 3 25 PSAs
FISCAL TERMS
FISCAL TERMS Licence Rentals per sq.km /yr: US.$ : IP-50, 1 ST EP 100 and 2 ND EP 200 Cost Recovery limit: 50%. Sequence: Opex, Exp and Cap/Dev. Ring fencing: Based on Exploration Licence or Development Licence
FISCAL TERMS Profit Sharing: Profit Sharing: To be based Tranches of daily total Production Profit Sharing: Negotiable item
FISCAL TERMS 4-categories on Profit-Sharing: Onshore and Shallow water- Oil case-(boe) First Tranche: 0 to 12,499; TPDC 70% Contr. 30% Onshore and Shallow water- Gas case (MMSCFD) First Tranche: 0 to 19.99; TPDC 60% Contr. 40% Deep water -Oil case-(boe) First Tranche: 0 to 49,999; TPDC 65% Contr. 35% Deep water -Gas case-(mmscfd) First Tranche: 0 to 149.999; TPDC 60% Contr. 40%
FISCAL TERMS TPDC Participation: TPDC may back in during development phase TPDC will not participate on Exploration phase Negotiable but not less than 25%. Allows carry with carried interest
FISCAL TERMS Royalty: Off the top- Onshore/Shallow 12.5% and Offshore 7.5% Income Tax (CIT) : 30% on Taxable Income as per Income Tax 2004
TERMS IN THE MODEL PRODUCTION SHARING AGREEMENT 2013 (MPSA 2013)
MPSA 2013 Work Program (Negotiable item) Geological: Geophysical: Geochemical and others studies
MPSA 2013 Licence Duration: IP:4yrs-1stEP:4yrs and 2ndEP- 3yrs Relinquishment of 50% Appraisal Programme: up to 3yrs for Oil case & up to 4yrs for gas case Development period: 25yrs renewable up to 20 years In totality Activities MAY last up to 58 yrs.
MPSA 2013 Training Fee :Non-Negotiable US.$ 500,000 p.a. Bonuses : biddable Signature- minimum US.$ 2.5Million Production-minimum US.$ 5.0Million Decommissioning Fund : Guarantees: Bank guarantees and Parent company guarantee
MPSA 2013 Domestic supply Obligation: Local Content: Assignment and transfer of rights rules Third Party Access: Coordination and Unitization of Petroleum operations
BIDDING INSTRUCTIONS
BIDDING INSTRUCTIONS MANDATORY DATA PACKAGES: Mandatory BRDP for offshore blocks : US.$ 750,000 per package Mandatory BRDP for Lake Tanganyika N: US.$ 350,000 per package Mandatory 2D SPAN data is available at a cost US$ 3.375 million per package
BIDDING INSTRUCTIONS OPTIONAL DATA PACKAGES: Optional 2D SPAN data is available at a cost US$ 750 per km The optional Phase I and Phase II data is available at a cost of US$220 per km. Proof of purchase of data when submitting bid
BIDDING INSTRUCTIONS National Preferences : Domestic Bidders may receive a margin of preference: Group A: domestic Bidders and joint ventures Group B: joint ventures of domestic and foreign firms Group C: bids offered by foreign contractors
BIDDING INSTRUCTIONS Criteria for Bid Evaluation: Preliminary examination Bid Responsiveness, Eligibility Detailed examination Work Program, Technical capability, Financial Capability, Fiscal Package, Safety, Health and Environment Protection Policy (HSE)
BIDDING INSTRUCTIONS Criteria of awarding points: Weightage (Points on a scale of 100): A: Work Program : 46 B: Technical capability: 10 C: Financial Capability 6 D: Fiscal Package: 34 E: Safety, Health and Environment Protection Policy (HSE): 4 Total: 100
BIDDING INSTRUCTIONS Bidding Document Price: A non-refundable fee of US$ 50,000 Deadline is 10.00 hours local time on Thursday 15th May 2014
CONCLUSION FISCAL & MPSA 2013 TERMS MPSA 2013 is a dynamic document Has kept pace with regional and global changes in petroleum prospectivity Provide for future opportunity to investments
Thank you Asante sana