Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
The tax registration of the 7 Petronas subsidiaries that will pay the 2019 state sales tax (SST) is due to be complete by tomorrow.
https://www.thestar.com.my/news/nation/2020/08/06/petronas-confirms-seven-subsidiaries-to-pay-sst-to-sarawak?s=am
Payments from Petronas may be received by the Sarawak comptroller of taxes soon after.
What then?
Perhaps with a thought to next year's state elections, the Chief Minister has made repeated references to "master plans" over recent months: redeveloping the state capital into a smarter metropolis; increasing tourism; boosting the digital economy; rolling out 5G nationwide, bringing clean water and other infrastucture improvements to more areas in need. Perhaps these 2 to 5 year visions also fuel speculation about the possibility of a snap election sooner.
Expanding the state's own upstream & downstream oil and gas activities is also a key part of the plan. To boost future state revenue even further and, through mandating favouring of Sarawak-based partners/contractors, boosting employment in the industry and thereby increasing average household incomes too.
https://www.nst.com.my/opinion/columnists/2020/05/593467/new-chapter-oil-and-gas-sector-after-sarawak-petronas-agreement
https://www.malaymail.com/news/malaysia/2020/01/13/sarawak-green-lights-oil-exploration-by-state-owned-petros/1827485
How will this growth be funded?
The state could, of course, use some of the Petronas payments to directly fund some initiatives and state-controlled bodies. But then there is also DBOS, the Development Bank of Sarawak, set up in January 2018 with capital of ~£100m. Perhaps DBOS will be further capitalised with a chunk of the collected £350m SST payments to manage the funding of state development projects.
I mentioned DBOS in this thread's initial post last week. For those that did not look it up, there are a couple of interesting points to note.
https://snipboard.io/jSkEer.jpg
DBOS Mission:
"To play a pivotal role in providing financing of public infrastructure and strategic sectors of the state economy in order to facilitate faster economic growth of Sarawak; and to transform the state’s non-renewable resource-based economy to a more broad-based sustainable economy. In so doing, the State will be able to create higher skill and better paying job opportunities, generate higher income and improve the livelihood of all Sarawakians"
DBOS Target Customers:
State Statutory Bodies; State Government Linked Companies (GLC) & State Government Controlled Entities
Petros is state owned. UPL's MoU partner, Brooke Dockyard, is state owned too.
So as another unfamiliar organisation enters the frame for UPL to be introduced to and get to grips with, does this further complicate the process for UPL?
Perhaps not!
https://snipboard.io/u7T0tw.jpg
A long while back, I posted details here of UPL's Malaysia-based company, registered in 2016, and of the office that was established in fashionable Kuching commercial development.
When researching some more on Petros, recently, it transpires that they moved to the same place!
https://snipboard.io/fg8xp7.jpg
https://www.thestar.com.my/news/nation/2020/08/06/petronas-confirms-seven-subsidiaries-to-pay-sst-to-sarawak?s=am
"subsidiaries are in the process of being registered with the comptroller for state sales tax as taxable persons liable for payment of SST to the state government. The registration process will be completed by Aug 15"
"The state government will now focus on strengthening Petroleum Sarawak (Petros) and the participation of Sarawakians and Sarawakian companies in the oil and gas sector in collaboration with Petronas"
A nice little video from 2018, outlining 3 reasons why the creation of Petros is a big deal for Sarawak.
It also mentions the Development Bank of Sarawak, its capital and how it fits in support of Petros and other state initiatives.
https://www.youtube.com/watch?v=mGAaqTOrXcU
Tweet bundling an illustration & article from yesterday mentioning approval for the Sarawak-Sabah Link Road (SSLR) project. https://twitter.com/_amnesic/status/1290537211394494464
This £1b new road project will connect Sarawak to it's northernmost division without the need to go through Brunei and the 8 border checkpoints along the Pan Borneo Highway.
As well as a spur roads into the Limbang district, the road connects to Lawas, a coastal town near the Sabah border, where development of a US$5b petrochemical/refinery complex was recently signed up under MoU.
https://www.thestar.com.my/news/nation/2019/06/10/cm-oil-and-gas-complex-will-boost-development-in-sarawaks-north/
Video of chief minister in this article also worth a watch.
https://dayakdaily.com/cm-sarawak-proves-it-can-venture-into-oil-gas-sector/?s=am
Personally, I find Newcrest's job ad for a senior manager to lead mergers & acquisitions analysis more interesting ;o)
https://twitter.com/_amnesic/status/1290163875531206658?s=20
Another article put a hugher number on ETAP's recruitment drive over Q2 : 102 people.
https://snipboard.io/ezZkqT.jpg
In one of my posts below (3-Jul), I commented about CP having spoken to another company CEO about assets in Tunisia.
"I recently found some information on a company with assets in Tunisia that appears now to be in financial difficulty. I forwarded details to CP and it is clear from his reply that he has already spoken with their CEO (about one asset, at least), but it seems that neither party wanted then to pursue negotiations further. So "a number of potential assets are currently under consideration or evaluation including well intervention / drill-ready candidates and existing production" is certainly happening in the background"
The 14-Jul RNS mentioned Brunei opportunity for the first time...
"The Company presently has several near term highly attractive transformational licence opportunities under review in South East Asia including Sarawak, Brunei and wider Malaysia"
Effectively the same company (another name/related entity) and CEO that CP had spoken with since joining UPL (and is friends with) had interests in Brunei some years back, before their JV got into disputes and later exploration phases never started despite seismics already identiying numerous leads and2 wells were left suspended. CP went to Brunei in November.
The infamous 29-Jun-2020 RNS included the following statements...
" a number of potential assets are currently under consideration or evaluation including well intervention / drill-ready candidates and existing production"
"Saouaf is not the sole focus of our North African efforts and the Upland team are presently engaged in the consideration and evaluation of a number of JV or acquisition possibilities including drill-ready, well intervention candidates and those with existing production."
Which reminded me of the 23-Apr-2019 Corporate Update RNS, which included...
"(ETAP), the Tunisian national oil company and our partner in the Saouaf Licence, has asked Upland to look at farming-in to specific, producing Tunisian oil fields where our expertise and access to funds will be of mutual benefit. A number of additional producing fields in Tunisia and elsewhere are also being assessed as candidates for a potential farm-in which would provide Upland with an ongoing revenue stream. These fields are mainly oil producers, at various stages of field life and most of which could provide Upland with net production rates in excess of 100 bbl/day."
Before, I have wondered whether the original RNS referred to Douleb, Semmama & Tamesmida (DST) fields, and posted here some related thoughts/research about a year ago...
https://snipboard.io/J0fExe.jpg
https://snipboard.io/R0Q8TY.jpg
I've recently found a new article about Douleb. This included...
"On the other hand, an ambitious development project, and another exploration project have been defined, including several wells, and which will probably be carried out in the near future"
Geographically, SW neighbour of Saouaf block. Maps from my post 3-Jul...
https://snipboard.io/QAIzPr.jpg
Original article in French...
https://lapresse.tn/67818/le-champ-petrolier-de-douleb-en-tunisie-centrale-un-joyau-mature-en-constante-cure-de-jouvence/
But that website is a bit flaky, so here is the French text...
https://pastebin.com/xa2uKv4x
More importantly, the English translation :o) ...
https://pastebin.com/eDeTDT3c
The Tunisian national oil company, ETAP, have recently closed a recruitment drive, open since April, looking for 64 agents and executives. https://snipboard.io/TobU7S.jpg
Roles being offered included:
Geological engineers; geophysical engineers; electrical/mechanical engineer, IT/software/media engineers, comunications specialist, finance/accountants, lawyer, HR/adminstrators, librarian, technicians, drivers & couriers.
It seems like it may be quite an uplift in personnel.
It seems that Upstream Online has picked up on our news in relation to Brooke and Sarawak.
https://www.upstreamonline.com/exploration/exploration-potential-a-major-attraction-am/2-1-840913
Found article text here also... https://snipboard.io/MpuCgs.jpg
It's... Sarawak Independence Day! (well it is 22-Jul in Sarawak already)
https://en.wikipedia.org/wiki/Sarawak_Independence_Day
Why not find out more about Sarawak, it's history, beauty & culture with this travelogue...
https://www.youtube.com/watch?v=rK9HGptrp50
Aside of a 0.3 second soundless clip slipped in somewhere in the middle, bizarrely, it doesn't really mention the snakes! Snakes! The place is crawling with more than 160 species of them. Even Rikki Tikki Tavi said s*d that and moved to India. Actually, if it was just crawling with snakes, that would be a relief. But no, terrifyingly, they also have flying snakes that can launch themselves at you from trees 100 metres away like some kind of horrific Tie Rack home delivery service.
Anyway, I digress, there's also some short features about their oil business, Bintulu and Miri towards the end.
3 days of public holidays in Sarawak between now and 3-Aug.
https://oglinks.news/petronas/news/sarawak-rep-calls-state-assembly-discuss-oil-gas-deal
OGA published Corallian relinquishment report (Mar-2020) for licence P2470 (Blocks 11/23, 11/24c and 11/25b). #UPL #IMFNorth
https://dataogauthority.blob.core.windows.net/external/relinqs/2020_04/P2470_11_23_11_24c_11_25b_Corallian_RelReport_April2020.pdf
Thanks Serif.
I've not seen anything that refers to ETAP charging by acreage, so no costs there. They seem to prefer to get their share via 50% buy-in rights after project is derisked. They incentivise licensee, as we saw, with chunk of the work commitment funding being put under escrow. But that happens after application and offer of licence and before formal permit signing. Funds are released as commitments are met.
Hi Serif
Just putting forward possibilities. We can each form our own view on probabilities.
We know ..
- UPL have an option to expand Saouaf block acreage.
- ETAP redefine blocks to make them more marketable.
- ETAP redefined some blocks some time before 31-Dec-2019.
- CP has been to ETAP multiple times late last year/early this.
- last opportunity to see ETAP face-to-face was Mar-2020, in London.
- applications made by 30-Apr are normally decided by 31-Jul.
- we have an in country rep/admin.
- Roberto is now directed at Tunisia technical work.
- Italian residents may enter Tunisia freely since 27-Jun.
- recent RNSs mention "in and around" Saouaf, "regional studies" and frequently suggest intent to look for additional permits/assets in Tunisia.
Whether such applications have already been made is unkown to us.
Additionally, the Saouaf CPR does show some prospects/discoveries just outside of the block. I have before found and posted here petroleum geology research papers that reference some interesting features and data just outside the Saouaf borders at various locations NW, W, SW & S.
I recently found some information on a company with assets in Tunisia that appears now to be in financial difficulty. I forwarded details to CP and it is clear from his reply that he has already spoken with their CEO (about one asset, at least), but it seems that neither party wanted then to pursue negotiations further. So "a number of potential assets are currently under consideration or evaluation including well intervention / drill-ready candidates and existing production" is certainly happening in the background.
ATB
Further to my post below (Sunday), where I mentioned ETAP blocks have been redefined. Here are like-for-like comparison maps of the blocks around Saouaf at Aug-2018 (bottom) and Dec-2019 (top).
https://snipboard.io/QAIzPr.jpg
Douleb (SW) carved up and part allocated against ETAP's name.
Jougar (NW) expanded south down Saouaf's western boundaries.
Mellegue (W) explanded east to border Saouaf.
Sidi Salem & Kairouan (SE) northern portions joined to form Sidi El Heni.
Errend (NE) hatched as "requested" block, presumably still Tethys Petroleum application from Jun-2018.
Yes. This one seemed unnecessarily wordy.
Any author finding their "highlights" section has more bullet points than there are paragraphs in the main body, or it occupying anywhere near the same amount of column inches, should sit back and have a rethink.
Hi Serif
Late last year and early this year CP made several trips to Tunisia to the ETAP data room, to meet their technical people and go on field trips with them.
Other RNSs this year may have hinted that the Tunisia priorities shifted from furthering Saouaf (as-is) in order to take advantage of "additional Tunisian opportunities" that had emerged and to explore new approaches ("in and around") Saouaf. Also mentioned: "projects" (plural), "regional study" and to "secure additional asset targets".
Fall of oil & natural gas prices earlier this year may have unexpectedly presented such new opportunities. Later, Covid-19 will have prevented further trips to ETAP and data rooms. I don't know how much can realistically be progressed/concluded ahead of restrictions easing.
Perhaps todays RNS reflects that, in the meantime, the Saouaf permit geology and seismic planning is again taking priority, but it also says...
"Saouaf is not the sole focus of our North African efforts and the Upland team are presently engaged in the consideration and evaluation of a number of JV or acquisition possibilities including drill-ready, well intervention candidates and those with existing production"
To get an idea when things may be nearer normal again, I've been keeping an eye on how local Covid restrictions have been easing, here: https://www.gov.uk/foreign-travel-advice/tunisia/entry-requirements
I posted ETAP links yesterday (below) where there is info about open block status and also that ETAP's next decision for offers made to them in the quarter up to 30-Apr, is due before 31-Jul.
Also, I don't know if it's an emerging pattern or coincidence, but I notice over the last 4 months update RNSs have come out near each month end.