RE: Mole / Devex20 Aug 2018 20:53
Some interesting posts which takes us back to the speculation as to what might be the area of disagreement between the parties.
There may of course be a very simple explanation. For example if I thought I was owed £400 million for work done, but you thought it was only £300 million we might well spend quite a long time arguing about it. The numbers are big enough.
There is a clue in the 2011 Admission Document – “……GOGC and Frontera Georgia must follow a detailed accounting procedure set out in the Block 12 PSA for recovery of its costs and expenses which is open to audit and approval by GOGC. Where outstanding recoverable costs and expenses for one year exceed the value of the Cost Recovery Crude Oil produced from Block 12, the excess can be carried forward for recovery in the next succeeding years until fully recovered……….Frontera has incurred a total of approximately US$302,530,000 of costs (including financing costs) in respect of its operations on Block 12, of which approximately US$271,003,000 has been approved by GOGC and approximately US$29,332,000 is anticipated by Frontera to be approved by GOGC for recovery…….”
So $302 million has increased to $420 million according to FRR, but has GOGC agreed that it is all allowable – especially as production remained so low? And do they agree on the treatment of the latest round of investment? And most of the expenditure is probably oil related – so back to the gas argument? Who knows – but at the end of the day this will surely be about money
No way of knowing of course, but I recall Zaza being asked about the $6 million tax rebate. He simply said if no agreement then add it to the recovery cost pool. Ie into a big pot.
Sign In
Follow the stocks
