Energulf Resources Inc. ENGFF

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Oil, Surestream lays off staff
The oil exploration work that realized Surestream Petroleum on the Ndunda block Muanda are stopped. Baudouin Ebeli Popo, general manager of Surestream, was sacked. The company also laid off workers en masse. The cause ? The exploration permit Surestream Petroleum were not renewed by the government. Without exploration contract for three years, the British company and its Italian partner had no reason to keep the staff. However, both partners had resumed hope for the renewal of license because of the involvement of former Minister of Hydrocarbons Crispin Atama Tabe.Clarification In a letter addressed to Surestream Petroleum Ltd, Atama Tabe proposed amendments to the original contract for production sharing license this block located in the coastal basin. These amendments were consecutive to the arrival of Ente Nazionale Idrocarburi (ENI) and wanted to clarify the position of Italian society in the partnership. ENI is formally present on the block since 2011 as partner and Surestream Congolese Hydrocarbons (COHYDRO). In fact clarification, Kinshasa wanted to tax the presence of this new partner. These amendments had to be approved by the parties, before being cast in a draft order and be an addendum to the production sharing contract.According to a source close to the situation, opened the way these proposals, if accepted by all parties, Ndunda license renewal and the transition to the second phase of exploration of five years. If the document was approved by Surestream, it is now in the hands of the Italian major who is expected soon to approve. Caught in his own trap In 2005, three licenses Surestream concluded with the government, in association with COHYDRO. These contracts cover exploration blocks Ndunda, Yema and Matamba-Makanzi in the coastal basin. In the latter two cases, it is associated with Glencore, the Swiss giant nonferrous metals which decided to embark on the oil adventure in the Congo. It is three years since Surestream awaits government approval to renew its three licenses. Kinshasa refused to date any progress because the authorities wanted to revise upwards certain rights and achieve substantial return on this permit which, obviously, was poorly negotiated.Caught in his own trap, the executive has finally abandoned this option. Another blunder that delayed the agreement: the price of renewal. The transition to the second exploration period now costs $ 1.5 million. Or Surestream signed his contract in 2005, at a time when the operation was charged 125,000 dollars by the state. With a stabilization clause, the company never accepted the principle of paying ten times the amount originally planned.Where years of battle with the authorities. To break the stalemate, the injunction to draft the amendments came from the prime minister, even at the level of the presidency of the Republic some councilors remained opposed to renewal without the application of a fee. Because of the paralysis of its activities in Congo for the whole period, Surestream now has three employees in the country.For ENI, the cure is even more dramatic: more no person employed full time by Italy in Congo. At its headquarters in Kinshasa, no activity is observed. The innovations of Surestream code explored oil deposits in the territory of Muanda, 200 km west of Matadi. In October 2013 it had closed, the central government has not renewed its exploration licenses for a reason that remains unknown. It is three years since the company was in the exploration phase of its project.In September 2010, Surestream finalized a farm-out agreement with the ENI group, which then took 55% stake in the Ndunda block in the former BasCongo.Since August 2015, Congo has adopted a new law that regulates the hydrocarbon sector. Among its main innovations, the establishment of a regime based on production sharing contract and the service contract, excluding concessional regime (abolished), the involvement of the national society in all activities oil chain (upstream and downstream oil), the lifting of the suspension of contracts in the upstream sector to encourage the return of investors and the principle of acquired rights. At the end of it, "the rights of hydrocarbons regularly acquired before the entry into force of the new law remain valid until they expire." Before the adoption of the new law, hydrocarbon production remained marginal in Congo for many years, barely 25,000 barrels of oil per day, for approximately $ 400 million revenue.Kinshasa that production has multiplied by ten, following the development of the Albertine Graben deposits in the East and the area consisting of common interest with Angola on the west coast of the continental shelf. The vagueness around the folder for the license renewal of Surestream violates legal provisions and principles set. It is not likely to encourage the development of the oil sector. 

Released 30-11-2015