Africa-focused oil and gas group Ophir Energy has agreed on fiscal
terms with the government over its Block R gas production sharing
contract (PSC) in Equatorial Guinea, Africa’s first floating liquefied
natural gas (FLNG) project.
Ophir, which is the operator of Block R
with an 80% stake, said it has established gas fiscal terms within the
PSC and a fiscal framework for the FLNG operation. The amendment
should be signed later on Tuesday by Ophir, 20% equity partner GEPetrol,
and the Ministry of Mines, Industry and Energy.
Ophir said that
the agreed terms provide a ‘robust, transparent financial framework’ for
Block R, which is estimated to contain recoverable resources of 3.4trn
cubic feet of gas.
Chief executive Nick Cooper said he was ‘very
pleased’ after the successful conclusion of discussions. He said:
‘Agreeing mutually beneficial financial terms de-risks the project and
will help facilitate external investment. This is positive not only for
the project viability and for all parties involved with the Block R FLNG
project.’
The next stage of the FLNG development will be to
appoint midstream partners, expected in November, with upstream front
end engineering design world planned for early 2015. First gas is not
expected until 2019.
Ophir Energy is currently pursuing a takeover of UK-listed Salamander Energy.
The
group announced on Monday that it had sent a letter to the board of
Salamander confirming the terms of the proposed offer, and ‘believes
there is compelling strategic logic for a combination of the two
businesses’.
Ophir’s shares were down 1.8% at 186.5p by 09:15 on
Tuesday, in line with the wider oil and gas sector which was tracking
crude prices lower.
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