The operator Maurel & Prom has announced in relation to its own, and Burren's, interests in Congo, which is translated below: "On 24 March 2006 the Congolese parliament approved the terms of the La Noumbi production sharing contract ("PSC"). Following the signature of a participation purchase agreement on 27 June 2005 between the Republic of Congo, Societe Nationale des Petroles du Congo ("SNPC"), M&P and Burren Energy Congo Ltd, which was amended by a supplemental agreement dated 18 October 2005, the partners in the Kouilou, M'Boundi and Kouakouala licences signed the following agreements with of Congo :
- Two amendments to the Kouilou PSC, both dated 21 November 2005
- A further amendment to the Kouilou PSC, applicable specifically to the M'Boundi licence, dated 5 December 2005.
- An amendment to the Kouakouala PSC dated 21 November 2005
These amendments to the Kouilou and Kouakouala PSCs, together with the La Noumbi PSC which was signed on 9 January 2004, were submitted for the approval of the parliament of the Republic of Congo in accordance with the provisions of the Hydrocarbon Code. The parliament has just passed draft bills approving these contracts and amendments.
This decision should permit the entry of SNPC into the M'Boundi development licence to the extent of 10% of the respective interests of M&P and Burren. After this sale the participating interest of M&P in M'Boundi will be 48.6%. This vote concludes the re-organisation of the petroleum rights of M&P and Burren Energy in Congo. In consideration of the entry of SNPC, the rights of M&P and Burren in relation to the M'Boundi development licence are extended to 2030 and those in relation to the Kouakouala development license are extended to 2023. SNPC, in turn, has confirmed that it will not acquire of rights in relation to the Kouilou exploration license as had previously been announced. This conclusion of this process demonstrates the climate of trust established between M&P, its partners, and Congo.
Furthermore, M&P announces the signature of a contract with Congolaise de Raffinage ("CORAF") to supply crude oil to their refinery, thus allowing the M'Boundi partners immediately to sell a further 5,000 bopd of production in addition to the 62,000 bopd currently exported via the Djeno terminal. M&P, as operator of the M'Boundi field, points out that the rights of Tullow Oil in this development license will terminate in 2017. As a consequence Tullow Oil will not benefit from the extension awarded to M&P and Burren Energy or from the corresponding production. Furthermore, the estimate of the reserves of the M'Boundi field published by Tullow Oil (29.3.06) is not, to our knowledge, certified. Lastly, M&P wishes to emphasise that neither the operator nor the partnership as a whole was consulted prior to publication of this estimate"
Burren wishes to make several comments for clarification in relation to the above announcement :
- As previously announced in August 2005, the percentage interest in the M'Boundi field being sold by Burren to SNPC is 3.5%, as a result of which Burren's current 35% interest will fall to 31.5%.
- The current term of the M'Boundi license expires in 2017 but is renewable for 5 years by mutual consent to 2022. The new final licence expiry date of 2030 matches that previously announced. The current term of the Kouakouala license expires in 2008 but is renewable for 5 years by mutual consent to 2013. The new final expiry date of 2023 compares with a previously announced final expiry date of 2018.
- Whilst the developments described above have been orally communicated to Burren by M&P the formal documentation evidencing the approvals referred to in the announcement has yet to be seen by Burren.
- Burren's original cash and profit oil consideration for the part-sale of its M'Boundi interest has been utilised to secure improvements to the terms of the original deal, being (i) the renunciation of SNPC's rights to the Kouilou exploration license (ii) the longer than anticipated development licence period for Kouakouala, and (iii) the final ratification of the La Noumbi license award.
