Invitation to Bid for Suriname International Competitive

Invitation to Bid
for
Suriname International Competitive Bid
Round 2014/2015
Paramaribo, 1 August 2014
Table of Content
Contents
1.
Introduction ................................................................................................................... 4
2.
Formal Bid Submission .................................................................................................. 5
3.
Calendar of Events ......................................................................................................... 6
4.
Highlights of the Model PSC 2014 ................................................................................. 7
4.1
General description ................................................................................................. 7
4.2
Management and Staatsolie Participation ................................................................ 7
4.3
Exploration ............................................................................................................. 7
4.4
Exchange controls ................................................................................................... 7
4.5
Applicable Law ...................................................................................................... 8
4.6
Description of the Blocks ........................................................................................ 8
5.
Data Packages ................................................................................................................ 9
6.
Bid-Qualification ......................................................................................................... 10
6.1
Information Relating to Technical Capacity .......................................................... 10
6.2
Information Relating to Financial Capacity ........................................................... 10
7.
Non-Biddable Items ..................................................................................................... 11
7.1
Relinquishment ..................................................................................................... 11
7.2
Royalty and Income Tax Rate ............................................................................... 11
7.3
Cost Oil Ceiling .................................................................................................... 11
7.4
Carried interest...................................................................................................... 11
8.
Biddable Items ............................................................................................................. 12
8.1
Exploration Period and Phases .............................................................................. 12
8.2
Profit Oil Share ..................................................................................................... 12
9.
Evaluation of Bids & Negotiations ............................................................................... 14
10.
Explanations of information and promotional seminars............................................. 15
10.1 Phone and Fax questions.......................................................................................... 15
10.2 Promotional seminars .............................................................................................. 15
10.3 Field visits ............................................................................................................... 15
11.
Representations, warranties and reserved rights ........................................................ 16
12.
Communications....................................................................................................... 17
13.
Waiver...................................................................................................................... 18
Schedule 1 Location Map Blocks 58, 59and 60 ................................................................... 19
Schedule 2 Geographical Description of Blocks 58, 59and 60 ............................................. 20
Block 58.......................................................................................................................... 20
Block 59.......................................................................................................................... 21
Invitation to Bid Offshore Suriname 2014/2015- Page 2 of 25
Block 60.......................................................................................................................... 22
Schedule 3
Declaration to be made by a duly authorized representative of the company... 23
Schedule 4
Summary Bid Form........................................................................................ 24
A.
Minimum Work Program phase 1 ......................................................................... 24
B.
Staatsolie Share of Profit oil .................................................................................. 24
Schedule 5
Awarded Points for Evaluation of the Bids Received ..................................... 25
Invitation to Bid Offshore Suriname 2014/2015- Page 3 of 25
1. Introduction
Staatsolie Maatschappij Suriname (Staatsolie) is offering blocks 58, 59 and 60 for the
purpose of Hydrocarbons Exploration and Development. A map indicating the location of the
Bidding Blocks is attached to this document as Schedule 1.
We are looking for international oil companies (IOC’s) that are ready and willing to commit
capital and expertise to a rapid Exploration and Development effort.
The bidding process will take place in two stages, a bid-qualification stage and a bidding
stage. Interested IOC’s are asked to submit a formal request to bid-qualify. As more fully
described in this document, this request should include specific information relating to the
company’s financial, technical and management capacity.
Staatsolie has several data packages available which includes seismic data and well
information. To submit a bid for block 58 leasing the Offshore Data Package 2012 is
mandatory. To submit a bid for blocks 59 and or block 60 leasing the Offshore Data Package
2009 is mandatory. Companies may submit their bid ultimately on 30 January 2015 at 13.00
Suriname time. Companies may also create consortia among themselves. It is estimated that
the bid evaluation will take a period of one month.
Any IOC that qualifies to bid may submit a bid in the English language for a maximum of
two block(s) in which they are interested.
The bid must include competitive offers with regard to (i) the Minimum Work Obligation
of phase one of the Exploration Period and (ii) Profit Sharing. Staatsolie based on the
evaluation of the bids received will award the blocks and will enter into a Production Sharing
Contract (PSC) after the negotiation stage. The fundamental ideas embodied in Staatsolie’s
2014 model PSC will not be modified as a result of these negotiations. Negotiations will have
to result in a PSC within a period of 4 months after awarding the blocks.
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2. Formal Bid Submission
Any IOC wishing to participate in the Suriname International Competitive Bid Round
2014/2015 (Suriname 2015 Bid Round), must submit its formal bid so as to be received by
Staatsolie, no later than Friday January 30th 13.00 hours, Suriname time.
The bid, in duplicate, must be sent by international courier or may be delivered by hand to
Staatsolie Maatschappij Suriname N.V.
Attn. Marny Daal-Vogelland
Dr. Ir. H.S. Adhinstraat 21
Paramaribo
Suriname
Two copies of the bid shall be contained in one sealed envelope, which shall be marked
“Suriname 2015 Bid Round”.
This envelope shall also include a covering letter identifying the name of the sender, the
IOC(s) that he/she represents and notification of the block(s) for which the bid is intended.
Acknowledgement of each bid, indicating time and date of receipt, will be made by Staatsolie
by faxed copy of the covering letter submitted by the IOC. The actual bid contained in the
inner sealed envelope will be opened on Friday, January 30tht at 14.00h local time by a
notary public. Separate bids in separate envelopes are required for each block.
This Bid Document replaces all previous communications from Staatsolie.
All interested IOC’s must follow the procedures established in this document. Any other
representations made by employees or officers of Staatsolie or any of its affiliates regarding
the terms of this Bid Document will not be binding on Staatsolie or any of its affiliates. This
document is issued solely for the assistance and guidance of potential bidders.
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3. Calendar of Events
Although Staatsolie will endeavor to maintain the time table given herein the schedule could
be subject to change.
Bid Document issued to industry
5 August 2014
IOC’s to qualify to submit a bid
1 September - 30 December 2014
Model PSC available for IOC’s that are 1 September 2014
quantified to bid
Presentations at Latin Upstream, Rio de 2 September 2014
Janeiro
Presentations at AAPG , Istanbul
17 September 2014
Presentations at Calgary
Mid October
Closing of bid submission process
30 January 2015at 13.00h. Suriname time
Opening of bids
30 January at 14.00h Suriname time
Meeting of Bid Evaluation Committee
1 February – 28 February 2015
Notification to winners
15 March 2015
PSC negotiations & signing
2nd quarter 2015
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4. Highlights of the Model PSC 2014
The following is a summary description of the general terms and conditions that will govern
the Exploration and Development of hydrocarbons in the three blocks allotted in Suriname
2015 Bid Round. This summary is qualified in its entirety by the terms of the 2014 Model
PSC in English which will be available to the IOC’s that are qualified to submit a bid (the
signed Dutch version of the PSC will prevail).
Staatsolie will enter into an agreement with IOC’s solely on the basis of a PSC.
4.1
General description
Suriname 2015 Bid Round, calls for participation in the Exploration of blocks 58, 59, and 60
by IOC’s either alone or in consortia, followed by the Appraisal and Development of any
commercial discoveries.
4.2
Management and Staatsolie Participation
The management and supervision of petroleum activities in each block will be carried out by
the IOC. The Operations Committee, which shall comprise of an equal number of members
nominated by Contractor and Staatsolie, will be responsible to approve certain stages of the
petroleum operations as further defined in the PSC.
If Staatsolie elects to participate in development and production operations, that participation will
not exceed 20%. Staatsolie will then participate as a paying partner in all development and
production expenditures.
4.3
Exploration
The Contractor will bear all exploration risk and expense through the Exploration Period that
will have a duration of maximum 7 years. During this time the Contractor must undertake the
agreed Minimum Work Program. At the end of each phase of the Exploration Period,
Contractor will have the opportunity to withdraw from the Contract Area without further
commitments.
Each block is subdivided into a number of sub-blocks, each of 5’ x 5’ or approximately 85
square kilometers. When entering a next exploration phase, IOC’s will be required to
relinquish a percentage of the original block. Relinquished areas shall conform to the subblocks.
4.4
Exchange controls
Funds committed by IOC’s and proceeds of borrowings or sales of crude oil or gas may be
maintained by the IOC’s in foreign currencies in bank accounts outside Suriname.
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4.5
Applicable Law
The PSC between the IOC and Staatsolie will be governed by the laws of Suriname. Any
disputes which may arise during the performance of the agreement between Staatsolie and the
IOC may be resolved by International Arbitration. Resource to sole expert determination of
certain technical matters will be allowed under the agreement between Contractor and
Staatsolie.
4.6
Description of the Blocks
A geographical description of the blocks 58, 59, and 60 is set out in Schedule 2.
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5. Data Packages
Details on the content of data package s are available on www.staatsolie.com/pio.
IOCs can obtain data package by sending an application to:
Ms. Marny Daal-Vogelland
Manager Petroleum Contracts
Staatsolie Maatschappij Suriname N.V.
Dr. Ir. H.S. Adhinstraat 21
Paramaribo
Suriname
Fax: +597 530093
Email: madaal@staatsolie.com
The IOC needs to sign a Confidentiality Agreement and transfer payment of the relevant
license fee before the data will be couriered to the IOC.
The data included in the package remains the property of Staatsolie. The resale of the
package to third parties or their publication without the written permission of Staatsolie is
strictly forbidden. Payment will not be reimbursed under any circumstances.
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6. Bid-Qualification
All applicants wishing to be considered for the acreage offering must be bid-qualified in their
own right. The bid qualification closes on 30 December 2014 at 13.00h Suriname time. The
process of bid-qualification is the evaluation by Staatsolie of the technical, financial and
management capabilities of each company or group of companies expressing interest in the
blocks on offer.
Companies wishing to bid-qualify must submit, as a minimum the documentation and
information described below in 6.1, 6.2 and 6.3:
6.1
Information Relating to Technical Capacity
Areas in the world where current exploration and production activities are conducted, current
production and investment (exploration and production) levels.
6.2
Information Relating to Financial Capacity
A. Audited consolidated financial statements for the applicant company with notes of the last
three (3) years, including:
i)
Balance Sheet
ii)
Income Statement
iii)
Cash Flow Statement
iv)
Nature of capitalization
B. Any additional information supporting the financial capacity of the applicant that the IOC
wishes Staatsolie to take into account.
6.3
Legal and Administrative Requirements
A. The name, title, address, telephone and fax number of the person who shall be the
single point contact in the applicant company to whom all correspondence should be
sent.
B. A copy of the Articles of Incorporation and By-Laws of the applicant company
The decision whether to bid-qualify an applicant will be made by Staatsolie in its sole
judgment and discretion. However, Staatsolie may reject any application without giving
reasons for so doing.
Qualified companies will be free to form consortia. The only restrictions that will apply are:
i)
ii)
Each consortium must name the Operator that has an interest of at least a 30% and
The minimum interest that may be held by an applicant in a consortium is 10%.
Invitation to Bid Offshore Suriname 2014/2015- Page 10 of 25
IOCs wishing to bid qualify can submit their application using the contact details of section
12.
Staatsolie will notify the IOC or group of IOC’s of its status as bid-qualified.
7. Non-Biddable Items
7.1
Relinquishment
At the end of each phase of the Exploration Period, contractor must relinquish a certain
percentage of the awarded block.
Block name
Moment
of
relinquishment
Block 58
At the end of
exploration phase
At the end of
exploration phase
At the end of
exploration phase
Block 59
Block 60
7.2
mandatory Percentage of
relinquishment
mandatory
each 25% of initial contract area.
each 25% of initial contract area
each 25% of initial contract area
Royalty and Income Tax Rate
A Royalty Rate of 6.25% of gross production is applicable offshore. The rate of Income Tax
is 36% and will be applicable for the duration of the PSC.
7.3
Cost Oil Ceiling
Per calendar year a maximum of 80% (block 58) and 75% ( blocks 59 and 60) of the gross
production minus royalty, shall be used for recovery of Exploration, Development and
Production costs.
7.4
Carried interest
Staatsolie can elect to participate in Development and Production operations for a maximum of
20%. Staatsolie will then participate as a paying partner in all Development and Production
expenditures. The Contractor shall carry Staatsolie during the Exploration Period.
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8. Biddable Items
Each qualified IOC or consortia may bid on a maximum of two (2) Blocks.
In case IOC’s already participate in offshore Suriname blocks, Staatsolie may take into
account its own view of the tendering company’s technical and financial capabilities of
participating in more than one block in offshore Suriname.
Every bid shall be accompanied by the following:
1. a signed declaration indicating that the model Production Sharing Contract 2015 has
been examined and the terms agreed, to be presented in the form attached hereto as
Schedule 3;
2. a summary of the proposals in respect of (i) the Minimum Work Program in Phase 1
of the Exploration Period and (ii) Profit Oil Sharing referred to in clause 8.2 presented
in the prescribed manner as indicated in the Summary Bid Form attached hereto as
Schedule 4;
3. legal identity of the bidder(s);
8.1
Exploration Period and Phases
IOCs are asked to bid the Minimum Work Program of phase 1 of the Exploration Period. IOCs
must bid to acquire, process and interpret at least the minimum seismic as follows:
For Block 58
Phase
Years
1
3
2
2
3
3
Minimum Requirement
1,000 km2 3D seismic
Spud 1 Well
Spud 1 Well
For Blocks 59 & 60
Phase
Years
1
3
2
2
3
2
Minimum Requirement
At least 3,000km 2D or 1000 km2 3D seismic
Spud 1 Well
Spud 1 Well
8.2
Profit Oil Share
IOC’s are asked to bid on top of the required level of Staatsolie’s Profit Oil share while X is a
multiple of 1%:
Block 58
R- Factor Slices
Staatsolie Share (%)
0-1
20 + X
1 - 1.25
20 + X
1.25 - 1.50
25 + X
1.50 - 1.75
30 + X
1.75 - 2
40 + X
2-3
50 + X
>3
70 + X
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Blocks 59 and 60
R- Factor Slices
0-1
1-1.25
1.25- 1.50
1.50-1.75
1.75-2
2-3
>3
Staatsolie Share (%)
15+ X
20+ X
25+ X
45+ X
60+ X
70+ X
75+ X
Where the R-factor is calculated for a Commercial Field as:
R=
(cumulative gross revenue - cumulative royalty - cumulative tax)
(cumulative recoverable petroleum expenditures)
“cumulative gross revenue” means the total value of all Gross Production from the Effective
Date to end of the respective Calendar Quarter, with Gross Production being valued at the
Market Price;
“cumulative royalty” means 6.25% of the cumulative gross revenue;
“cumulative income tax” means the total of all income taxes calculated as the tax rate
multiplied by total Profit Oil from both Contractor and Staatsolie related to this Commercial
Field, from the Effective Date to the end of the respective Calendar
Quarter; and
“cumulative petroleum expenditures” means the sum of all recoverable Petroleum
Expenditures related to the Commercial Field from the Effective Date to the end of
the respective Calendar Quarter.
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9. Evaluation of Bids & Negotiations
A
Staatsolie is seeking an early well commitment but all tenders will be evaluated on
their technical merits. Each work program offered must include an estimate for the
seismic acquisition and drilling operations.
B
A bid proposal shall be evaluated on the basis of the Point System to be used for
Evaluating Bids set out in Schedule 5.
C
The submitted bids will be evaluated by Staatsolie according to the following
weighted criteria.
a. The minimum Exploration Work Program for phase 1 (60%)
b. Staatsolie Profit Oil Share (40%)
C. Where several bidders for a particular block are awarded the same number of points, each
such bidder shall be required to bid a signature cash bonus for the purpose of determining
the preferred bidder for that block.
D. Successful bids shall be announced by 15March 2015.
E. IOC’s awarded a block will be invited to sign with Staatsolie a PSC and negotiation for
each block will proceed on an exclusive basis with the IOC or consortia of companies.
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10. Explanations of information and promotional seminars
10.1 Phone and Fax questions
Staatsolie will be pleased to assist companies who have questions regarding the process via
the contact details listed in Section 12. While minor queries will be dealt with by phone, any
substantive issues will be handled in writing.
10.2 Promotional seminars
Staatsolie will be conducting promotional seminars as given in the Calendar of Events.
10.3 Field visits
Bid-qualified companies may visit Staatsolie.
Neither Staatsolie nor any of its affiliates will be responsible for any loss or damage
whatsoever, including personal injuries that might occur during any of the visits.
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11. Representations, warranties and reserved rights
While the information made available in this document and the information which may
subsequently be made available, whether as a supplement to this Bid Document, in
answers to questions from prospective bidders, or in the data packages is believed to be
fairly presented, neither Staatsolie nor any of its affiliates, their employees or agents
makes any representation or warranty, either express or implied, as to the correctness of
such information nor will they accept any claim for damages if such information proves
to be incorrect.
Staatsolie reserves the right, in its sole discretion, prior to the submission of bids, without
any explanation, to:
i)
ii)
iii)
withdraw, add to, or substitute all or any of the blocks offered;
waive any condition to the bid-qualification of any company; and
revise the schedules, procedures and conditions pertaining to the Suriname 2015
Bid Round.
Staatsolie also reserves the right, at any time, in its sole discretion, to declare any bid or
the entire Suriname 2015 Bid Round void or to disqualify any bid-qualified company
without giving any reason. IOC’s submitting bids shall accept that in no event may a
claim be filed against the Government of the Republic of Suriname, Staatsolie or any of
its affiliates or any of their agents or employees as a result of any such decision.
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12.
Communications
All communications must be sent to the name, address and fax numbers given below.
Marny Daal-Vogelland
Manager Petroleum Contracts
Staatsolie Maatschappij Suriname N.V.
Dr. Ir. H.S. Adhinstraat # 21
ParamariboSuriname
Phone: + 597 439781
Fax: + 597 530093
Email:madaal@staatsolie.com
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13.
Waiver
In submitting a bid under the terms of conditions given in this official bid document any IOC
or member of a consortium submitting a bid accepts the said terms and conditions and waives
any recourse to appeal or litigation in any jurisdiction except as provided herein.
This document replaces all previous communications from Staatsolie or any of its affiliates
on the Suriname 2015 Bid Round.
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Schedule 1 Location Map Blocks 58, 59and 60
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Schedule 2 Geographical Description of Blocks 58, 59and 60
The boundary of blocks on offer is defined by the geographical co-ordinates in terms of the
WGS 84 geodetic datum, WGS 84 spheroid.
Geographic Coordinate System of the coordinates
Region
Datum
Spheroid
Semi-Major Axis
Semi Minor Axis
First Eccentricity Squared
Inverse Flattening
South America, Suriname
World Geodetic System 1984 (WGS 84)
World Geodetic System 1984
a=6378137.000 m
b=6356752.314 m
e²=0.006694379
1/f=298.2572236
The boundary follows lines of equal latitude or longitude.
Block 58
Block 58 comprising approximately 5,844 km² is situated offshore Suriname and is bounded
by the lines joining the points listed hereunder.
Block 58
#
1
2
3
4
5
6
Estimated Area
Acres
sq km
1444272.08
5844.762
Block 58
Lat
Lon
7°00'00'' N 56°34'09'' W
7°25'00'' N 56°21'26.5'' W
7°39'57.9'' N 56°14'59.6'' W
7°55'00'' N 56°12'00'' W
7°55'00'' N 55°50'00'' W
7°00'00'' N 55°50'00'' N
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Block 59
Block 59 comprising approximately 9,800 km² is situated offshore Suriname and is bounded
by the lines joining the points listed hereunder.
Block 59
#
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Estimated Area
Acres
sq km
2421760.46
9800.517
Block 59
Lat
Lon
6° 15.00' N 56° 59.17' W
6° 16.19' N 56° 58.63' W
6° 19.17' N 56° 57.01' W
6° 28.01' N 56° 51.70' W
6° 32.12' N 56° 49.22' W
6° 35.13' N 56° 46.92' W
6° 43.99' N 56° 42.34' W
6° 45.00' N 56° 41.82' W
6°45'00'' N 56°41'44'' W
7°00'00'' N 56°34'09'' W
7°00'00'' N 56°25'00'' W
6°45'00'' N 56°25'00'' W
6°45'00'' N 55°20'00'' W
6°15'00'' N 55°20'00'' W
WGS 1984
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Block 60
Block 60 comprising approximately 10,105 km² is situated offshore Suriname and is bounded
by the lines joining the points listed hereunder.
Block 60
Estimated Area
Acres
sq km
2497076.89 10105.31
Block 60
#
1
2
3
4
5
6
7
8
Lat
Lon
6°15'00'' N 55°20'00'' W
6°45'00'' N 55°20'00'' W
6°45'00'' N 53°35'00'' W
6°40'00'' N 53°35'00'' W
6°40'00'' N 53°40'00'' W
6°25'00'' N 53°40'00'' W
6°25'00'' N 53°45'00'' W
6°15'00'' N 53°45'00'' W
WGS 1984
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Schedule 3 Declaration to be made by a duly authorized representative of
the company
Company Name
Address
(Company name) declares that is has reviewed the provisions of the model Production
Sharing Contract (PSC) 2015 for blocks 58, 59and 60 and all its annexes having analyzed all
its terms and condition for submission of a bid in response to this bid document “Suriname
International Competitive Bid Round 2015”.
(Company name) agrees that said model will be the basis of the PSC that will eventually be
signed and that changes in the model PSC will be limited to (i) avoid any ambiguity or (ii)
increase clarity.
(print or stamp name here)
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Schedule 4 Summary Bid Form
Block:_______________________
A. Minimum Work Program phase 1
Phase 1 Minimum Work Program Work
Geophysical
SEISMIC:
Non biddable minimum Additional Seismic Total acquisition
2D seismic
3D Seismic
DRILLING:
Wells ____
Note: Spudding of at least one exploration well in the second phase and one exploration
well in the third phase is a requirement of the exploration period if entered into.
B. Staatsolie Share of Profit oil
R- Factor Slices
0-1
1-1.25
1.25- 1.50
1.50-1.75
1.75-2
2-3
>3
Staatsolie Share (%)
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Schedule 5 Awarded Points for Evaluation of the Bids Received
Block 58
Item
2D seismic
3D seismic
Well
Staatsolie profit share by increments of
1% for all slices
Points
0.2 points per km
2 points per km2
20,000
9,000 points per increment
Block 59 & 60
Item
2D seismic
3D seismic
Well
Staatsolie profit share by increments of
1% for all slices
Points
0.2 points per km
2 points per km2
10,000
6,000 points per increment
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