REPUBLIC OF CYPRUS
Ministry of Energy, Commerce, Industry and Tourism
3RD LICENSING ROUND
OFFSHORE CYPRUS
2016
Submission of Applications
Guidance Note
This Guidance Note is provided for assisting the potential applicants. In case of any discrepancy
between this Guidance Note and the notices published in the Official Journal of the European Union
and the Official Gazette of the Republic of Cyprus, the provisions of the notices prevail.
All the relevant information, documents and notices concerning the 3rd Licensing Round are available
on the website of the Ministry of Energy, Commerce, Industry and Tourism on the following webaddress: www.mcit.gov.cy.
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
Table of Contents
1. Definitions .................................................................................................................................................................. 3
2. Introduction ............................................................................................................................................................... 4
2.1 3RD Licensing Round .................................................................................................................................................................. 4
2.2 Background ................................................................................................................................................................................ 4
2.2.1
Legal and Fiscal Framework ................................................................................................................................................... 4
2.2.2
Available Seismic Data / Reports (Database) ......................................................................................................................... 5
2.2.3
Strategic Environmental Assessment...................................................................................................................................... 6
2.2.4
Delimitation of the Exclusive Economic Zone of the Republic of Cyprus ................................................................................ 6
3. Description of the Application Procedure ............................................................................................................... 8
3.1 Licensing Round Indicative Timetable ..................................................................................................................................... 8
3.2 Participation Rules ..................................................................................................................................................................... 8
3.2.1
Applicant.................................................................................................................................................................................. 8
3.2.2
Exclusion from Participation .................................................................................................................................................... 9
3.3 Requirements for Participation ................................................................................................................................................. 9
3.4 Request for Clarifications, Comments on the Preliminary Model Contract and Publication of the Definitive Model
Contract ................................................................................................................................................................................................ 9
3.5 Preparation and Submission of Applications ........................................................................................................................ 10
3.5.1
Application Fee ...................................................................................................................................................................... 10
3.5.2
Language of Applications ...................................................................................................................................................... 10
3.5.3
Validity of Applications .......................................................................................................................................................... 10
3.5.4
Submission of Applications ................................................................................................................................................... 10
3.5.5
Content of Applications ......................................................................................................................................................... 11
3.5.6
Laws and Regulations ........................................................................................................................................................... 14
3.5.7
Costs and Expenses Incurred by the Applicant ..................................................................................................................... 14
4. Evaluation of Applications ..................................................................................................................................... 15
4.1.
4.2.
4.3.
Evaluation Criteria ................................................................................................................................................................... 15
Evaluation Process ................................................................................................................................................................. 15
Evaluation Mark Scheme for the Technical & Financial Proposal ...................................................................................... 16
5. Conclusion of the Licensing Round ...................................................................................................................... 17
5.1
5.2
Notification of Selection of an Applicant for a Block ............................................................................................................ 17
Signing of the Contract ............................................................................................................................................................ 17
Annex A ........................................................................................................................................................................... 18
Description of Exploration Blocks.................................................................................................................................................... 18
Annex B ........................................................................................................................................................................... 19
Outline of the Minimum Data Package to be Purchased for Each Block ...................................................................................... 19
1. Block 6 ............................................................................................................................................................................................. 19
2. Block 8 ............................................................................................................................................................................................. 19
3. Block 10 ........................................................................................................................................................................................... 19
Annex C ........................................................................................................................................................................... 21
Application Letter Form ..................................................................................................................................................................... 21
Annex D ........................................................................................................................................................................... 22
EXHIBIT B to the Application Technical and Financial Proposal .................................................................................................. 22
Annex E ........................................................................................................................................................................... 24
Preliminary Model Exploration and Production Sharing Contract ................................................................................................ 24
Guidance Note
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Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
1. DEFINITIONS
-
The following terms when used in this Guidance Note shall have the meaning assigned to them below:
“Advisory Committee” means the committee established under Section 6 of the Law.
“Applicant” means a legal entity or group of legal entities as provided in Clause 3.2.1.1, submitting an
Application in accordance with this Guidance Note.
“Applicant’s Representative” means a person appointed by an Applicant under a power of attorney to act
on behalf of the Applicant in relation to all matters pertaining the Licensing Round.
“Application” means the set of information and documents submitted by the Applicant to the Minister in the
form and manner prescribed by this Guidance Note and within the Application Deadline.
“Application Deadline” means the 22nd July 2016 and 13:00 hrs local (Cyprus) time.
“Application Validity Period” means the period during which an Application must remain valid pursuant to
Clause 3.5.3.
“Block” means an area as described in Annex A that is open for Applications in the Licensing Round.
“Contract” means the Exploration and Production Sharing Contract between the Republic of Cyprus and a
Selected Applicant.
“Law” means the Hydrocarbons (Prospection, Exploration and Exploitation) Law of 2007, as amended from
time to time.
“Licensing Round” means the process being undertaken pursuant to this Guidance Note to select an
Applicant for each Block.
“Minister” means the Minister of Energy, Commerce, Industry and Tourism of the Republic of Cyprus.
“Model Contract” means the Preliminary Model Exploration and Production Sharing Contract attached
hereto as Annex E, or the Definitive Model Exploration and Production Sharing Contract prepared and
issued in accordance with Clause 3.4.
“Operator” means the Applicant or, if the Applicant comprises several legal entities, the entity designated
as such in accordance with Clause 3.2.1.2.
“Regulations” means the Hydrocarbons (Prospection, Exploration and Exploitation) Regulations of 2007,
as amended from time to time.
“Selected Applicant” means an Applicant selected to execute a Contract with respect to a Block.
-
Any other term used in this Guidance Note, which has not been assigned a specific meaning, shall have
the meaning assigned to it by the Law, the Regulations or the Model Contract, as the context may require.
Guidance Note
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Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
2. INTRODUCTION
2.1
3RD LICENSING ROUND
The Republic of Cyprus, represented by the Ministry of Energy, Commerce, Industry and Tourism (“Ministry”),
announced with its notice published in the Official Journal of the European Union on 24th March 2016 (Notice
No. 2016/C110/03) an invitation to apply for hydrocarbon exploration authorizations (licences) and subsequent
hydrocarbon exploitation licences. The licenses will be granted, on the basis of competitive applications under
the terms and conditions provided herein, to companies or groups of companies to carry out exploration on
Blocks within the exploration area described in Annex A.
The invitation and application procedure of this 3rd Licensing Round, as well as the hydrocarbon exploration
and exploitation activities in the Republic of Cyprus, are governed by the Law and the Regulations.
The Blocks to be offered for licensing are within the Exclusive Economic Zone (EEZ) of the Republic of Cyprus
and are Blocks 6, 8 and 10 as described in Annex A of this Guidance Note.
Applications are to be submitted to the Minister of Energy, Commerce, Industry and Tourism as described in
the Clause 3.5.4 below no later than 13:00 hrs (local Cyprus time) on 22nd July 2016.
Applications reaching the Ministry after this date and time will not be taken into consideration.
2.2
BACKGROUND
2.2.1 Legal and Fiscal Framework
Pursuant to the Law and Regulations, an exploration licence is granted for an initial period not exceeding three
(3) years and may be renewed for up to two (2) periods of two (2) years each, provided that the licensee
(holder of an authorization) has fulfilled all its obligations with respect to the current exploration period. The
licensee is required to relinquish at least 25% of the original contract area upon the expiry of the initial
exploration period; at least 25% of the original contract area upon the expiry of the first renewal period and
subject to the relevant provisions of Regulation 10(2) the remaining contract area upon the expiry of the second
renewal period.
In case a commercial discovery is made during exploration, an exploitation licence shall be granted, after the
approval of a development and production plan, for a period of twenty-five (25) years, which may be renewed
for a further period of ten (10) years.
An Application shall be specific to a designated Block. Applicants wishing to apply for more than one Block
shall submit a separate Application for each Block.
A Selected Applicant for a Block shall enter into a Contract with the Republic of Cyprus on the basis of the
Definitive Model Contract issued in accordance with Clause 3.4.
The competent authority for the granting of licences is the Council of Ministers of the Republic of Cyprus.
In this Licensing Round, the exploration licences will be, subject to Regulation 7 of the Regulations, in the form
of the Definitive Model Contract. The grant of the Licence will not be subject to a participation of the Republic
as envisaged in Section 16 of the Law.
With respect to the tax regime, licensees are subject to all taxes generally applicable in the Republic of Cyprus
in accordance with the laws and regulations in effect. However, the corporate income tax shall be included in
the Republic’s share of profit hydrocarbons and paid by the Republic on behalf of the Licensees.
Guidance Note
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Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
2.2.2 Available Seismic Data / Reports (Database)
The Ministry, with the assistance of Petroleum Geo-Services Geophysical A.S. (PGS), undertook during the
years 2006-2009 two multi-client 2D seismic surveys, amounting to approximately a total of 19,036 line-km of
seismic data (6,770 line-km of the MC2D-CYP2006 seismic survey and 12,266 line-km of the MC2D-CYP2008
seismic survey). Two multi-client 3D seismic surveys of 659 km2 within Block 3 (MC3D-CYP2009) and 2,280
km2 within Block 11 (MC3D-CYP2013) were also conducted by PGS in 2007 and 2013, respectively. The PGS
dual sensor streamer technology (GeoStreamer®) was utilised for the MC2D-CYP2008 survey, which provides
enhanced resolution, better penetration and improved imaging to obtain advances in the structural
interpretation.
The multi-client seismic surveys, along with the following seismic data obtained within areas which have been
relinquished by the licensees, are commercially available to the Applicants for assessing the hydrocarbon
potential offshore Cyprus:



564 km2 of 3D seismic surveys acquired in 2009 and 2013, within the relinquished part of Block 12.
1,495 line-km of 2D seismic survey acquired in 2011 within the relinquished part of Block 12.
1,500 line-km of 2D seismic survey acquired in 2013, within Blocks 6, 7 & 10.
Figure 1: Map showing the seismic data available for the 3rd Licensing Round.
The Ministry conducted evaluation of the exploration areas with the assistance of Beicip-Franlab, including the
integration of the multi-client seismic data (MC2D-CYP2006, MC3D-CYP2007 & MC2D-CYP2008). The
resulting reports are the following:
-
“New Exploration Opportunities in Offshore Cyprus. Exploration Plays and Leads (from Interpretation of
PGS 2D Seismic Surveys: MC2D-CYP 2006 and MC2D-CYP 2008)”.
“New Exploration Opportunities Offshore Cyprus. A 3D Seismic Interpretation Study in Block 3 (PGS,
MC3D-CYP 2007)”.
Guidance Note
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Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
2.2.3 Strategic Environmental Assessment
According to the provisions of the Assessments of the Effects on the Environment of Certain Plans and/or
Programmes Law of 2005, which transposed into national legislation the provisions of European Directive
2001/42/EC, the Ministry conducted a Strategic Environmental Assessment (SEA) of the hydrocarbon licensing
programme within the EEZ of the Republic of Cyprus to ensure environmental protection and sustainable
development. A relevant opinion on the SEA was subsequently issued by the Environmental Authority. The
SEA study and the relevant opinion of the Environmental Authority are available on the Ministry’s website
(www.mcit.gov.cy).
In the conduct of their operations, the licensees will be subject to all environmental legislation that is applicable
in the Republic, including all requirements, conditions and restrictions enacted, or which may in the future be
enacted, by the competent authorities pursuant to the said legislation.
2.2.4 Delimitation of the Exclusive Economic Zone of the Republic of Cyprus
In 2004, the Republic of Cyprus proclaimed by Law its Exclusive Economic Zone, the outer limit of which does
not extend beyond the 200 nautical miles from the baselines from which the breadth of its territorial sea is
measured. In accordance with the United Nations Convention on the Law of the Sea (UNCLOS 1982) and the
relevant customary international law, the delimitation between the Exclusive Economic Zone of the Republic of
Cyprus and the Exclusive Economic Zone of other neighbouring coastal States is pursued on the basis of the
median-line principle. In the absence of an agreement, the outer limit of the Republic’s Exclusive Economic
Zone is the median-line, measured from the respective baselines from which the breadth of its territorial sea is
measured (Figure 2).
The Republic of Cyprus has so far entered into agreements on the delimitation of the Exclusive Economic
Zone, on the basis of the median-line principle and in accordance with the provisions of the United Nations
Convention on the Law of the Sea (UNCLOS 1982), with three of its neighbouring States.
The agreement between the Republic of Cyprus and the Arab Republic of Egypt on the delimitation of the
Exclusive Economic Zone was ratified and entered into force in 2004.
Moreover, the Republic of Cyprus signed in 2007 a delimitation agreement with the Republic of Lebanon, the
ratification of which is pending.
Likewise, an agreement on the delimitation of the Exclusive Economic Zone was signed between the Republic
of Cyprus and the State of Israel in 2010, which was ratified and entered into force in 2011.
In December 2013, the Republic of Cyprus and the Arab Republic of Egypt signed a framework agreement
concerning the development of cross-median line hydrocarbon resources, which entered into force in 2014.
Negotiations between the Republic of Cyprus and the State of Israel, on a framework agreement concerning
the joint development and exploitation of cross- median line hydrocarbons reservoirs, are currently underway.
Guidance Note
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Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
Figure 2: Map showing the Official Agreements (solid lines) of the Republic of Cyprus with Neighbouring Countries.
Guidance Note
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Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
3. DESCRIPTION OF THE APPLICATION PROCEDURE
3.1
LICENSING ROUND INDICATIVE TIMETABLE
Although the Minister will seek to maintain the timetable set forth below, this may change. Announcements of
changes will be published on the Ministry website.
Publication of announcement in the Official Journal of the E.U.
Commencement date for general questions and clarifications
Y (24 March 2016)
Y*
Final date for clarification requests and for comments on the
Preliminary Model Contract
13/05/2016 (Y+50 calendar days)*
Estimated date for release of the Definitive Model Contract and final
date for replying to general questions and clarifications
02/06/2016 (Y+70 calendar days)
Application Deadline (final date for submission of bids)
Commencement of Evaluation of Applications
Y+120 calendar days at 13:00 hrs local
(Cyprus) time (Χ; 22nd July 2016)*
21/08/2016 (Χ+30 calendar days)
Expected date for notification to Selected Applicants
20/11/2016 (Χ+120 calendar days)
Expected date for Finalization of Contracts
29/12/2016 (Χ+160 calendar days)
Expected date for Signature of Contracts
18/01/2017 (Χ+180 calendar days)
* This is a fixed date.
The Minister, in his sole discretion, may make additions, corrections or modifications to the Preliminary Model Contract,
Such additions, corrections or modifications will be published on the Ministry Website by Y+40 (03/05/2016).
3.2
PARTICIPATION RULES
3.2.1 Applicant
3.2.1.1
Applicants shall be legal entities duly organized and in good standing, with the necessary financial
capacity and operating competence to conduct the proposed hydrocarbon operations in accordance
with the Law, the Regulations and the Contract.
3.2.1.2
In the event the Applicant comprises several legal entities, the following shall apply:
(a)
All of the entities shall be jointly and severally liable for the obligations of the Applicant pursuant to
this Licensing Round and its Application;
(b)
The Application shall indicate which of the entities shall be designated to act as the Operator under
the Contract. By signing the Application, the designated Operator shall accept such nomination
and each other individual company constituting the Applicant shall appoint the designated
Operator to act in such capacity and to be responsible for all matters vis à vis the Minister for the
purpose of its Application under this Licensing Round. The appointment of the designated
Operator under the Contract shall be subject to the approval of the Council of Ministers at the time
of awarding the Contract;
(c)
The Application shall specify the participating interest which each entity intends to have as part of
the Contractor under the Contract. The Operator shall hold a minimum thirty percent (30%) interest
and each entity comprising the Contractor shall hold a minimum five percent (5%) interest.
Guidance Note
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Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
3.2.2 Exclusion from Participation
An Applicant shall be excluded from participation in the Licensing Round if:
3.3
(a)
The Applicant attempts directly or indirectly to influence in any way the opinion of the Advisory
Committee, the Ministry or of any of its members or of any other public person or officer in
exercising the duties/powers vested in it/him under the Law and the Regulations;
(b)
The Applicant has pursued and has come in possession of classified information or documents
regarding the Licensing Round through unlawful means;
(c)
The Applicant is directly or indirectly involved in any act of corruption, extortion, bribing, offering
commission or giving gratuity to anyone with the intention of influencing anyone in the evaluation of
the Applications or the designation of the Selected Applicant.
REQUIREMENTS FOR PARTICIPATION
Before the submission of an Application, a prospective Applicant is required to:
(a)
Pay an Application Fee in accordance with Clause 3.5.1.;
(b)
Purchase all the available seismic data within the Block(s) applied for. An outline of the minimum
data package to be purchased by the potential Applicant is included in Annex B of this Guidance
Note.
Notwithstanding the foregoing, the Applicant is not obliged to purchase and pay for these data if the same data
have been previously purchased. In the case where the Applicant has previously purchased only part of the
available data on the selected Block(s), it will be required to purchase the data not previously acquired and pay
the price thereof which shall be calculated as specified in Annex B. In the event that the Applicant comprises
several entities, only one of the entities is obliged to purchase the data.
3.4
REQUEST FOR CLARIFICATIONS, COMMENTS ON THE PRELIMINARY MODEL CONTRACT AND PUBLICATION
OF THE DEFINITIVE MODEL CONTRACT
Prospective Applicants have the right to submit clarifying questions regarding this Guidance Note in writing to
the Permanent Secretary, Ministry of Energy, Commerce, Industry and Tourism (Tel.: +357-22409310; Fax:
357-22409348; Email: [email protected], no later than seventy (70) calendar days prior to the Application
Deadline. Prospective Applicants should note that clarifications and answers to questions will generally not be
provided individually, but will instead be made available on the Ministry website. Prospective Applicants must
monitor the website themselves to ensure that they see all questions and answers posted.
Clarifications and any other supplementary information relating to this Guidance Note may be issued by the
Permanent Secretary in writing at any time up to fifty (50) calendar days before the Application Deadline. Such
information shall be deemed upon issuance an integral part of this Guidance Note and shall be published on
the Ministry’s website.
Prospective Applicants are encouraged to review and comment on the Preliminary Model Contract attached as
Annex E to this Guidance Note. The Ministry will consider all comments and suggestions for change that are
received by it from prospective Applicants no later than seventy (70) calendar days prior to the Application
Deadline. Comments and suggestions should be submitted by email to [email protected], no later than
seventy (70) calendar days prior to the Application Deadline in Microsoft Word or PDF formats. The Ministry
will not comment individually on submitted comments and suggestions. On or about fifty (50) calendar days
before the Application Deadline, the Minister will issue the Definitive Model Contract with such changes in
response to any comments and suggestions received, as the Minister in its sole discretion deems appropriate,
and will post the Definitive Model Contract on the Ministry’s website.
Guidance Note
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Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
3.5
PREPARATION AND SUBMISSION OF APPLICATIONS
3.5.1 Application Fee
3.5.1.1
The Applicant shall pay the Ministry an Application Fee of ten thousand Euros (€10,000) for each
Application.
The payment shall be made prior to the Application Deadline by bank transfer to the Central Bank of
Cyprus (SWIFT CODE: CBCYCY2NACC) through TARGET 2 for the credit of the Government
General Account, Account No: CY16 0010 0001 0000 0000 0600 1010, in favour of Ministry of Energy,
Commerce, Industry and Tourism, Application Fee, 3rd Licensing Round.
A written acknowledgement of payment will be issued to the Applicant upon receipt of the payment.
3.5.2 Language of Applications
Applications and all accompanying documentation must be prepared and submitted in the English
language. In the event that the originals of certain documents or certificates are not in the English
language, the Applicants must submit these documents or certificates in their original language along
with notarized translations1 in the English language.
3.5.3 Validity of Applications
3.5.3.1
Applications must remain valid for a period of one hundred and ninety (190) calendar days starting
from the day following the Application Deadline.
3.5.3.2
The Minister may request, by written notice, the Applicants to extend the validity of their Applications
for a specified period of time, at least ten (10) calendar days prior to the expiry of the Application
Validity Period.
3.5.4 Submission of Applications
3.5.4.1
Applications must be delivered not later than 22nd July 2016 at 13:00 hrs local (Cyprus) time in a
sealed envelope marked:
(a)
With the name and the address of the Applicant or, where the Applicant is a group of legal entities,
of the Operator and each of the legal entities.
(b)
With the phrase:
“Application for the 3rd Licensing Round Offshore Cyprus
Block N°___”
to the following address:
The Hon. Minister
Ministry of Energy, Commerce, Industry and Tourism
6 Andrea Araouzou Street
1421 Nicosia
Cyprus
Tel.: +357-22409310
If no notarized translation services are available in a certain country, a translation performed by a publicly authorized translator
would be sufficient.
1
Guidance Note
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Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
3.5.4.2
Submission of Applications may be either by hand or by courier and a written acknowledgment of
submission will be given to the Applicant upon receipt of the Application. Each submitted Application
will be stored in a secured room until the Application Deadline. Further handling of the Applications
shall be according to the procedure set out in Clause 4.2 below.
3.5.4.3
Applications shall be submitted, typed or written in indelible ink and shall contain no interlineations,
erasures or overwriting except as necessary to correct errors made by the Applicant, in which case
such corrections shall be initialled by the Applicant's Representative. All material contained in the
Application should be preferably on A4 size paper for ease of handling, although A3 size paper may
be accepted, folded in A4 size, if necessary.
3.5.4.4
Applications shall include one (1) original (hard copy) marked as ORIGINAL and seven (7) copies (true
colour photocopies of the original hard copy) marked as COPY. In addition, one (1) electronic copy of
the Application shall be included, in Microsoft Office and/or PDF format, without any passwordprotection or encryption.
3.5.4.5
Each page of the ORIGINAL must be initialled by the Applicant’s Representative unless it is a bound
book in which case only the first and the last page need to be initialled.
3.5.4.6
Applicants undertake to inform the Minister promptly of any material changes occurring after the date
of the Application with respect to the information disclosed pursuant thereto.
3.5.4.7
In the event that an Applicant wishes to submit an Application for more than one Block, it is acceptable
for the Applicant to submit only one (1) original plus seven (7) copies of the documents described in
Clause 3.5.5.1(2) below, regarding Part A (Legal, Financial, Technical and QHSE Capacity
Documentation) of the Application. However in that case, in the Application Letter accompanying the
Application of each individual Block, it should be clearly stated with which Application the above
documents of Part A have been submitted, so that reference can be made. Notwithstanding the above,
the Applicant should submit one Application for each Block.
3.5.5 Content of Applications
3.5.5.1
Applications shall include an application letter and two exhibits marked Exhibit “A” and “B” including
supporting documentation in accordance with the following:
(1)
The Application Letter shall be in the form provided in Annex C. It shall be completed and signed by
the Applicant’s Representative, and be accompanied by a power of attorney of the Applicant’s
Representative, or, in the event the Applicant comprises several entities, of the representative of each
of said entities.
(2)
Exhibit A: Legal, Financial, Technical and QHSE Capacity Documentation
(A1)
Legal Capacity Documentation
The Applicant (in the case of a group of legal entities, all legal entities) should submit the following
documents:
(1)
(2)
(3)
Guidance Note
Evidence (whether in the form of an extract of a commercial register, a copy of a
resolution of the board of directors, or a legal opinion by a reputable attorney
practicing in the jurisdiction of incorporation of the Applicant) showing that the
Applicant Representative’s power of attorney was signed by a person or persons
duly authorized to bind the Applicant.
An official copy of the constituent documents of the Applicant (i.e., depending on the
jurisdiction of incorporation of the Applicant, the certificate of incorporation,
memorandum of association, articles of incorporation, statutes and/or by-Laws).
An extract of the commercial registry relating to the Applicant, showing the full name,
main business address, and capital stock. Where such information is not available
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MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
(4)
(5)
(6)
(7)
(A2)
from the commercial registry, a notarized, signed statement from the company
secretary or similar officer providing such information.
If not indicated in document (3) above, a document from a governmental or official
entity showing that the Applicant is in good standing in the jurisdiction of
incorporation.
If not indicated in document (3) above, a document from a governmental or official
entity showing that the Applicant is not being liquidated and is not in insolvency
proceedings. Where such information is not available from the commercial registry, a
notarized, signed statement from the company secretary or similar officer providing
such information.
The name, nationality/jurisdiction of incorporation and address of any partner or
shareholder who, directly or indirectly, holds twenty (20) percent or more of the
voting shares of the Applicant or otherwise has an interest that could constitute
control, together with the names, nationality and addresses of the officers and
directors of such partner or shareholder. Such information should be provided to the
extent known by the Applicant or the Applicant’s directors and officers after due
inquiry. Where the Applicant is not the parent company of the group of companies of
which it is a member, a corporate organization chart showing the chain of ownership
from the parent to the Applicant.
A notarized, signed statement from the general counsel or similar officer that there
are no pending litigation, arbitration, legal proceedings or other circumstances which
may lead to the insolvency or bankruptcy of the Applicant or that could reasonably
be expected to prevent the Applicant from fulfilling the obligations under the
Contract.
Financial Capacity Documentation
The Applicant (in the case of a group of legal entities, all legal entities) should submit the information
below. All financial statements must be prepared under the International Financial Reporting
Standards or other internationally recognized generally accepted accounting principles. Companies
may furnish their published annual reports filed with a stock exchange or securities regulators, and
supplement those reports with any information below that is not contained therein.
(1)
(2)
(3)
(4)
(5)
Guidance Note
The audited consolidated financial statements of the Applicant for the last three (3)
years, including the balance sheet, income statement, statement of changes in
shareholders’ equity, cash flow statement, notes to the accounts and, where
required under local law or applicable accounting principles, the Directors’ report.
The auditor’s or auditors’ report(s) referencing the abovementioned financial
statements of the Applicant, signed by an independent public accountant and
prepared in accordance with applicable auditing standards. Alternatively, in the case
of state-owned companies organized in a jurisdiction that does not provide for an
external audit of such companies’ accounts, and no such external audit has been
performed, the financial statements described in clause (1) must be prepared by a
certified public accountant, and should be submitted together with a statement
signed by a lawyer affirming the absence of an audit requirement for such stateowned company under the law of such jurisdiction.
References from two reputable banks or financial institutions doing business with the
Applicant.
Present and historical (prior three (3) years) credit rating of the Applicant’s (or its
parent company’s) long-term unsecured debt from Standard & Poor’s Rating
Services, Moody’s Investor Services Inc. or Fitch Ratings, if available.
A description of the Applicant’s material lines of credit, credit agreements, publicly
traded debt securities, off-balance sheet liabilities and guarantees of third party
obligations.
Page 12 of 24
Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
(6)
(7)
(8)
(9)
(A3)
Details of any medium-term plans and/or material contingent liabilities, if these could
reasonably be expected materially and adversely to impact the financial status of the
Applicant.
A statement describing any material changes in any of the information set forth
above, since the date as of which such information was prepared.
A description of the Applicant’s financial capabilities, including any financial security
to cover liabilities potentially deriving from the offshore hydrocarbon activities.
Any additional information supporting the financial capacity of the Applicant.
Technical Capacity Documentation
The Applicant (in the case of a group of legal entities, all legal entities) should disclose details on the
Applicant’s experience with respect to exploration and production activities including specifically (to
the extent applicable):
(1)
(2)
(3)
(4)
(5)
(6)
(7)
A good faith estimate of the total capital expenditure in hydrocarbon activities in
each of the last three (3) years.
Number of offshore exploration wells drilled (as operator) in each of the last three (3)
years.
Number of offshore wells other than exploration wells drilled (as operator) in each of
the last three (3) years.
Number of offshore wells, exploration and others, drilled (as operator) in a sub-salt
environment (with water depths (A) greater than five hundred (500) metres and less
than one thousand (1,000) metres and (B) greater than one thousand (1,000) metres
in each of the last three (3) years.
Number of offshore wells drilled (as operator) in a high-pressure and/or hightemperature environment in each of the last three (3) years.
Experience as operator in developments in water depths greater than five hundred
(500) metres, clearly identifying field name, location, water depth, year of first
production, 2015 production. For any such developments not yet in production, the
Applicant should provide evidence of project progress and receipt of all required
internal and regulatory approvals, together with scheduled peak production rate and
date.
Experience as operator in scale (greater than five hundred (500) million cubic feet of
gas per day) gas development and exploitation projects, clearly identifying project
name, location, water depth (if applicable), 2015 production and primary
commercialization structure (LNG, power, GTL, petrochemical, pipeline sales, etc.).
(A4.1) QHSE Documentation
The Applicant (in the case of a group of legal entities, all legal entities) should submit evidence of
proper operational procedures and sensitivity related to issues surrounding Quality, Health, Safety
and the Environment. The Applicant must be able to demonstrate the ability to observe all applicable
international standards in such areas. Specifically, all Applicants are required to submit (to the extent
applicable):
(1)
(2)
QHSE policy statement(s)
Evidence of established and implemented QHSE Management System(s)
(A4.2) QHSE Information
(1) QHSE certification(s) according to best international industry practice (e.g., ISO
certification 9001, ISO 14001 and/or OHSAS 18001), with copies of certificates
approved by the awarding official entities.
(2) A copy of the Quality, Health, Safety and Environment Management System(s)
(QHSEMS), or equivalent.
Guidance Note
Page 13 of 24
Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
(3) A copy of Corporate Social Responsibility reports or initiatives for the past three (3)
years.
(4) Experience as operator in environmentally sensitive areas.
(5) QHSE record of material events for the previous three (3) years including oil spills, site
fatalities and injuries, major fires and explosions, mechanical/structural failures,
emissions and waste, and main remedial efforts.
(3)
Exhibit B: Technical and Financial Proposal for the Block
The Applicant shall submit a Technical and Financial Proposal for each Block applying for, in the form
provided in Annex D of this Guidance Note, which shall include:
-
A description of the concept and approach for the execution of the exploration work.
The minimum exploration work for each exploration sub-period.
The economic terms with respect to the cost oil/gas recovery and to the profit oil/gas sharing.
The signature bonus.
The production bonus.
The minimum annual training budget during exploration and during exploitation.
A short environmental notice stating the possible impact that the exploration activities will have on
the environment and ways of its effective handling.
The technical and financial proposal shall provide the proposed minimum exploration work broken
down into the items specified and for each exploration period, together with the other information
specified in Annex D.
It is expected that the minimum exploration work shall include at least one (1) exploration well in each
of the initial period and the first renewal period of the exploration license.
The technical proposal shall also include indicative amounts with respect to the proposed minimum
exploration work. Such indicative amounts are meant to be the Applicant’s good faith estimate of the
costs of carrying out the minimum exploration work.
The technical and financial proposal shall include all the parameters of the bidding process, as
specified in Annex D.
3.5.5.2
The Advisory Committee may, at its discretion, request from the Applicant a clarification of its
Application. The request for clarification and the response of the Applicant must be in writing.
3.5.5.3
An Applicant may include in the Application such additional information deemed by the Applicant as
relevant or useful.
3.5.5.4
All information not in the public domain contained in an Application and its Exhibits will be kept
confidential.
3.5.6 Laws and Regulations
It is the responsibility of the Applicants to familiarize themselves with all relevant laws and regulations
of the Republic of Cyprus.
3.5.7 Costs and Expenses Incurred by the Applicant
Each Applicant shall bear all costs and expenses incurred in the preparation and submission of the
Application. Regardless of the final outcome of the Licensing Round (including any cancellation of the
Licensing Round), the Republic will in no case be responsible or liable for any such costs and
expenses incurred by the Applicant, including the payment of the Application Fee and the seismic data
purchase.
Guidance Note
Page 14 of 24
Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
4. EVALUATION OF APPLICATIONS
4.1. EVALUATION CRITERIA
In accordance with the Law and the Regulations, the elements to be considered in the evaluation of the
Application are:
(a)
the technical and financial ability of the Applicants;
(b)
the ways in which the Applicant intends to carry out the activities that are specified in the licence;
(c)
the financial proposal of the Applicant in order to obtain the licence; and,
(d)
any lack of efficiency and responsibility that the applicant has shown under any previous licence or
authorisation of any form in any country of the world.
If, following evaluation under the above criteria, two or more applications have equal merit, the proposals of the
Applicants regarding the protection of public safety, public health, security of transport, protection of the
environment, protection of biological resources and of national treasures possessing artistic, historic or
archaeological value, safety of installations and workers and planned management of hydrocarbon resources,
shall be taken into account.
4.2. EVALUATION PROCESS
After the Application Deadline, the Minister shall request (by a notice) that the Chairman of the Advisory
Committee convenes a meeting of the Advisory Committee in order to commence the procedure for the
evaluation of applications.
The Chairman of the Advisory Committee shall send, without delay, a copy of the Applications for each Block to
the members of the Advisory Committee and convene a meeting of the Committee to examine the Applications.
In the course of the above-mentioned meeting, the Advisory Committee shall examine whether an Application
is submitted in accordance with the provisions of the Law and Regulations and whether the information that it
contains complies with the requirements of this Guidance Note and is adequate for the evaluation of the
Application and the grant of the Licence.
If the Advisory Committee deems that the information before it is inadequate or incomplete, it may request from
the Applicant or a third person any additional information it deems necessary, as well as the carrying out of
inspections or obtaining the opinion of or reports by consultants or other experts.
If and when the Advisory Committee considers that the information that is before it is sufficient, it examines the
Application and submits a reasoned opinion to the Minister as to whether the Licence is to be granted and on
which terms or as to whether the Application is to be rejected. The opinion shall be contained in a preparatory
report, prepared by the Advisory Committee, on the basis of a procedure decided by it. The Minister shall
submit his opinion in relation to the applications and the preparatory report of the Advisory Committee to the
Council of Ministers.
The Minister negotiates the terms and provisions of the Contract with the Selected Applicant for each Block.
The negotiation will focus on the Technical and Financial Proposal. During negotiation the overall Proposal
may only be improved. In case where the negotiation is successful, the text of the Contract shall be submitted
to the Council of Ministers for approval, and thereafter, if approved and signed by both parties, the relevant
authorization shall be granted. The final decision will be taken by the Council of Ministers which has full
discretion in deciding whether or not to issue a Licence, and if so, to whom and on what conditions.
Guidance Note
Page 15 of 24
Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
4.3. EVALUATION MARK SCHEME FOR THE TECHNICAL & FINANCIAL PROPOSAL
The basis of the mark scheme for the technical and financial proposals is the following:
Criteria
Initial exploration period
(three years)
Technical
Mark
Items for Evaluation
First renewal of exploration period (two years)
Financial
Second renewal of exploration period (two
years)
2D seismic survey
3D seismic survey
Exploration well
Other G&G activities
2D seismic survey
3D seismic survey
Exploration well
Other G&G activities
2D seismic survey
3D seismic survey
Exploration well
Other G&G activities
Production Sharing Contract
Cost Hydrocarbon Recovery
economic terms
Profit Hydrocarbon Sharing
Signature Bonus
Production Bonus
During exploration
During exploitation
Bonuses
Training budget
Guidance Note
(up to)
Page 16 of 24
5
20
70
5
10
90
10
90
-
Weight (%)
20%
10%
5%
70
20
5
65%
5
Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
5. CONCLUSION OF THE LICENSING ROUND
5.1
NOTIFICATION OF SELECTION OF AN APPLICANT FOR A BLOCK
The Minister shall invite the Selected Applicant for a Block to the Ministry of Energy, Commerce, Industry and
Tourism in Nicosia, in order to sign the Contract at a fixed date and time.
The Selected Applicant for a Block must present itself at the date and time set in the invitation mentioned
above to sign the Contract. If the Selected Applicant fails to sign the Contract within the above time limit, the
Minister may declare that the Selected Applicant is deemed to have forfeited all rights regarding the Application
and may revoke the decision to award the Contract to the said Selected Applicant. In such an event the
Minister has the right to call the next Applicant for negotiations.
5.2
SIGNING OF THE CONTRACT
The Selected Applicant must submit the following documents no later than the date of signing of the Contract:
(a)
The bank guarantee covering the work obligations of the initial exploration period, as per Article 4.2.6
and Annex E of the Contract; and
(b)
The parent company financial and performance guarantee required under Article 35 and Annex F of the
Contract.
In the event the Selected Applicant is a group of companies, the parent company guarantees required under
paragraph (b) shall be provided by each of said companies.
The cost of any stamps (or stamp duties) to be affixed on the Contract shall be borne by the Selected
Applicant.
5.3
NOTIFICATION OF UNSUCCESSFUL APPLICANTS
All Applicants other than the Selected Applicants awarded and signed the Contract will be considered as
unsuccessful Applicants and they will be duly notified in writing. In the event that the Advisory Committee finds
that an Application is not submitted in accordance with the provisions of the Law and Regulations and/or the
information that it contains does not comply with the requirements of this Guidance Note, the Application will be
rejected without evaluation and the Applicant of the said Application will be notified in writing.
Guidance Note
Page 17 of 24
Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
ANNEX A
DESCRIPTION OF EXPLORATION BLOCKS
Blocks 6, 8, and 10 (Figure 3) are included in this 3rd Licensing Round and applications shall be submitted for these
Blocks only.
Figure 3: Map showing the exploration Blocks on offer in the 3rd Licensing Round Offshore Cyprus.
The available Blocks are delimited by the following geographical coordinates (WGS84):
Block No.
Longitude
Latitude
31:15:00
33:30:00
31:15:00
34:10:00
31:55:00
34:10:00
31:55:00
33:30:00
32:35:00
33:30:00
32:35:00
34:10:00
33:15:00
34:10:00
33:15:00
33:30:00
30:39:02
33:30:00
31:55:00
33:30:00
31:55:00
33:08:24
31:36:30
33:11:30
31:15:00
33:18:40
31:07:00
33:21:20
Block 6
Block 8
Block 10
Guidance Note
Page 18 of 24
Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
ANNEX B
OUTLINE OF THE MINIMUM DATA PACKAGE TO BE PURCHASED FOR EACH BLOCK
1. Block 6
Multi-client seismic data available through PGS:


583.5 line-km of 2D seismic data, PSTM (part of the MC2D-CYP2006 survey)
562.7 line-km of 2D seismic data, PSTM (part of the MC2D-CYP2008 survey)
The cost for obtaining the license to use the above data is:
 License fee: US$300/line-km
 Uplift: US$500/line-km for any data within Block 6
Seismic data available through the Ministry:

363.9 line-km of 2D seismic data, PSTM & PSDM
 License fee: US$500/line-km
 Uplift: US$500/line-km for any data within Block 6

339.5 line-km of 2D seismic data, PSDM
 License fee: US$300/line-km
 Uplift: US$500/line-km for any data within Block 6
2. Block 8
Multi-client seismic data available through PGS:


561.4 line-km of 2D seismic data, PSTM (part of the MC2D-CYP2006 survey)
1,432.3 line-km of 2D seismic data, PSTM (part of the MC2D-CYP2008 survey)
The cost for obtaining the license to use the above data is:
 License fee: US$300/line-km
 Uplift: US$500/line-km for any data within Block 8
3. Block 10
Multi-client seismic data available through PGS:


397.8 line-km of 2D seismic data, PSTM (part of the MC2D-CYP2006 survey)
399.0 line-km of 2D seismic data, PSTM (part of the MC2D-CYP2008 survey)
The cost for obtaining the license to use the above data is:
 License fee: US$300/line-km
 Uplift: US$500/line-km for any data within Block 10
Seismic data available through the Ministry:

661.4 line-km of 2D seismic data, PSTM & PSDM
 License fee: US$500/line-km
 Uplift: US$500/line-km for any data within Block 10

273.3 line-km of 2D seismic data, PSDM
 License fee: US$300/line-km
 Uplift: US$500/line-km for any data within Block 10
Guidance Note
Page 19 of 24
Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
Figure 4: Map showing the minimum data to be purchased for Block 6, 8 & 10.
The seismic data are available for review:
- in the data room at the Ministry of Energy, Commerce, Industry and Tourism
(you may contact in writing the Director Hydrocarbons Service, Ministry of Energy, Commerce, Industry and
Tourism; Tel.: +357-22409310, Fax: +357-22409348, E-mail: [email protected]);
- in the data rooms at PGS offices worldwide
(you may contact Mr Nicolai Dahl, Sales & Marketing Manager ME & CIS, MultiClient, PGS;
Tel.: +47-67514144, E-mail: [email protected]).
Guidance Note
Page 20 of 24
Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
ANNEX C
APPLICATION LETTER FORM
The Hon. Minister
Ministry of Energy, Commerce, Industry and Tourism
1421 Nicosia
CYPRUS
3rd Licensing Round Offshore Cyprus
Application for Block __
Having examined the Guidance Note with due care, and having reviewed the applicable legislation, the undersigned
(Applicant) (companies comprising an Applicant) hereby submit(s) an application for an exploration licence for the Block
referred to above, in accordance with the terms of the Submission of Applications Guidance Note for the 3rd Licensing
Round Offshore Cyprus, under the terms and subject to the undertakings specified hereinafter.
Note: Members of a bidding group may sign separate copies of the letter, but each copy should contain signature blocks for all
members of the bidding group, and be accompanied by a power of attorney.
Our technical and financial proposal is provided in Exhibit B of this Letter.
We declare that we have reviewed the provisions of the Definitive Model Exploration and Production Sharing Contract
applicable to this Licensing Round as published on the website of the Ministry of Energy, Commerce, Industry and
Tourism, including all of its annexes, and all provisions designated as applicable specifically to the Block referred to
above, and confirm that if we are awarded the aforesaid Block, we will enter into such Contract, and provide the related
guarantees, with only such changes in the Contract as are provided in Clause 4.2 of the Guidance Note, or to correct
obvious mechanical errors.
We agree to be bound by our Application for a period of 190 calendar days as from the Application Deadline as provided
in the Guidance Note (or for any period for which our Application Validity Period has been extended, pursuant to Clause
3.5.3.2 of the Guidance Note).
The following is to be inserted in the event of a bidding group.
We hereby appoint ……………………… (Company) as the Operator in accordance with Clause 3.2.1.2 of the Guidance
Note, and declare that if we are awarded the aforesaid Block the participating interests in the Contract will be allocated
amongst us as follows:
…………………………………….……………………………………………………………
…………………………………………………………………………………………………
Very truly yours,
………………………………………………………………. (Name of entity)
By ___________________________________________
Name: …………………………………………………………
Date: …………………….…………………………………….
Title: …………………………………………………………...
(Add additional signature blocks for additional bidding group members)
Guidance Note
Page 21 of 24
Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
ANNEX D
EXHIBIT B TO THE APPLICATION
TECHNICAL AND FINANCIAL PROPOSAL
Block No.: ………….
Applicant: …………………………………………………………………………………………
1. Description of the concept and approach for the execution of the exploration work
A brief description of the concept and approach of the execution of the exploration work is provided in Schedule 1 to this
Exhibit B.
2. Minimum Exploration Work Programme
Initial exploration period (3 years)
Quantity
(in number)
Unit
2D seismic
3D seismic
Exploration well
Quantity
(in words)
Line-kilometres
Square kilometres
Number,
Minimum True
Vertical Depth
(TVD) in metres
Other activities
Indicative amount: --------------------------------------------------------------------------------- Euros
First Renewal period (2 years)
Quantity
(in number)
Unit
2D seismic
3D seismic
Exploration well
Quantity
(in words)
Line-kilometres
Square kilometres
Number,
Minimum True
Vertical Depth
(TVD) in metres
Other activities
Indicative amount: -------------------------------------------------------------------------------------- Euros
Second Renewal period (2 years)
Quantity
(in number)
Unit
2D seismic
3D seismic
Exploration well
Quantity
(in words)
Line-kilometres
Square kilometres
Number,
Minimum True
Vertical Depth
(TVD) in metres
Other activities
Guidance Note
Page 22 of 24
Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
3. Economic Terms of the Contract
- Maximum Cost Hydrocarbons Recovery percentage: ________%
- Profit Hydrocarbons Sharing (%):
[A]
________
[B]
________
The share of Profit Hydrocarbons to which the Contractor shall be entitled to is equal to the relevant percentage
according to the value of the “R” Factor as indicated in the table below:
Contractor’s Share of Profit Hydrocarbons
(in percentage)
R≤1
[A]%
1 < R ≤ 2.5
[ A] – [ ( [ A] – [ B ] ) X ( R - 1 )
/ ( 2.5 - 1 ) ]
R > 2.5
[B]%
[B] shall always be lower than [A]
"R" Factor
The “R” Factor shall be calculated using a formula provided in the Model Exploration and Production Sharing Contract.
The Republic of Cyprus’ share of Profit Hydrocarbons shall be 100% minus the Contractor’s share of Profit
Hydrocarbons.
4. Bonuses
- Signature Bonus (amount in Euros): ……………………………………………………………………..
(Reference: Art. 27.2 (i) of Model Contract)
- Production Bonus - 1st tier (amounts in Euros):
……………………………………………………………
(Reference: Art. 27.2 (ii) of Model Contract)
- Production Bonus - 2nd tier (amount in Euros): ……………………………………………………………………
(Reference: Art. 27.2 (iii) of Model Contract)
5. Minimum Annual Training Budget
- During the exploration period (amount in Euros): ………………………………………………………………..
(Reference: Art. 22.3 (i)) of Model Contract)
- During the exploitation period (amount in Euros): ……………………………………………………………………
(Reference: Art. 22.3 (ii)) of Model Contract)
6. Environmental Notice
- A brief description of the concept and approach of the execution of the exploration work is provided in Schedule 2 to
this Exhibit B.
Guidance Note
Page 23 of 24
Submission of Applications
3RD LICENSING ROUND
HYDROCARBON EXPLORATION ACTIVITIES OFFSHORE CYPRUS
REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE, INDUSTRY & TOURISM
ANNEX E
PRELIMINARY MODEL EXPLORATION AND PRODUCTION SHARING CONTRACT
Posted on the Ministry’s website.
Guidance Note
Page 24 of 24
Submission of Applications