* Companies can submit proposals from May this year
* Seychelles revising model agreement, fiscal regime
* Source says royalties likely to rise to 10 pct from 5 pct
By George Thande
VICTORIA, March 13 Seychelles plans to revamp
its model petroleum production sharing agreements before
inviting oil and gas companies to bid for exploration licences
from May 2013, an energy official said.
East Africa has become a hotbed of exploration after oil
discoveries in Uganda and Kenya, as well as natural gas finds in
Tanzania and Mozambique. Seychelles is attracting interest.
"Many firms have approached us but they will have to wait
until after April to submit their proposals," Eddy Belle, chief
executive of upstream regulator PetroSeychelles, said on
"By then we will have put in place the few pieces of
legislation required to modernise our model petroleum agreement
and the new fiscal regime," he told Reuters in an interview.
"We will not have a licensing round per se. The way we will
do it is: after April 2013, oil companies can come in at any
time and provide a proposal for an area," Belle said.
Belle did not comment on the details of the planned changes
in oil laws but another government official, who did not wish to
be named, said they would probably include an increase in
royalties to 10 percent of petroleum revenue from 5 percent.
The source said there may be room for companies to negotiate
a reduced royalty if the new charge made exploration unviable.
So far, Afren Plc and Australia's WHL Energy
are the only companies holding exploration licences in
Seychelles, an archipelago of islands in the Indian Ocean
northeast of Madagascar. A few others have expressed interest.
Belle said that after April, once a company had approached
the government for an exploration area, other interested ones
would have up to 90 days to submit bids for the same block.
After the 90 days expired, the government would evaluate and
award the exploration area to the company that showed it had the
financial capability to conduct exploration and then go into
production if it struck commercial quantities of oil.
"We are talking about companies which will have to start
with exploration and if they are successful they will move on to
exploitation," Belle said.
Belle said WHL Energy was still looking for a partner but
was committed to drilling, while Afren had completed a 3-D
seismic survey covering 3,350 square km and was now processing
the data and identifying a drilling location.