The International Association of Geophysical Contractors IAGC, is asking for financial relief from regulatory authorities and banking institutions in hydrocarbon prospecting and producing countries in Africa.
Such relief is being sought in order to mitigate the negative effects of the global crisis
In collaboration with the Johannesburg based African Energy Chamber, the contractors are making several demands on governments, including waiving taxes on service companies for six months; waivng withholding taxes, especially for non-resident companies, for six months.
“These measures are intended to mitigate the expected loss of jobs and abandonment of erstwhile viable projects in the African oil and gas sector in the face of a global recession”, the IAGC says in a joint statement with the AEC.
The two organisations are urging banks to provide no interest loans and loan guarantees for local service companies with ongoing projects with operating E&P companies. They are asking governments to grant extensions on all exploration projects for 24 months; extend the non-exclusive geophysical data confidentiality periods to a minimum of 15 years where such is not already in place; waive part of the work project commitments for exploration companies.
They are also praying for setting up and implementing government and private sector discussions on revising some of the fiscal terms in the Production Sharing Contracts “that make it difficult for explorers to meet commitments in today’s market environment and aid capital fundraising”, and they want a 50% reduction in fees due to the state like training funds, surface rental, social projects et.
Nikki Martin, President of the IAGC highlighted the importance of the geophysical and exploration (G&E) industries in maintaining a stable energy industry. “National Authorities should be working to maintain expected timelines for licensing rounds, including all review periods and award announcements which contribute to business certainty and a stable pipeline for future oil production. Energy security for the continent will only be ensured with continued exploration,” she said. “The G&E industry provides the key to unlocking energy resources that will allow for rebuilding economies when the COVID-19 virus has run its course, however, in order to rebuild, there must be a viable energy industry when that time comes.”
Source: Africa Oil + Gas Report