The purpose of the round is to execute exploration and production sharing contracts (PSCs) with eligible firms to operate the areas: Jangalikalan block, Juma-Bashikurd block and Kashkari block.
All three blocks have recognized hydrocarbon-bearing accumulations;
— Jangalikalan block: Jangalikalan (gas),
— Juma-Bashikurd block: Juma (gas), Bashikurd (gas),
— Kashkari block: Kashkari (oil), Angoat (oil), Aqdarya (oil).
Most of the gas and oil fields were found in the 1970’s during Soviet led exploration campaigns, apart from the Angoat oil field, which was discovered in 1967. Angoat is the only oil field, which has been in continued production in Afghanistan, and this is the field, which was in traditional production for heating purposes together with crude oil.
The Kashkari field was reported to pump modest amounts of oil for six months in the late 1980s. The remaining gas and oil fields in this tender have not been in production. Producing reservoirs are found in Cretaceous and Jurassic. The bulk of the gas reserves are in the Jurassic and have some H2S.
The size of blocks and left over recoverable reserves are expected as follows: Jangalikalan block (1,999 square kilometers): 19 Bm3, Juma-Bashikurd block (1,861 km2): 33 Bm3, Kashkari block (1,723 square kilometers): 64.4 MM Bbl (plus 143.8 MM Bbl of possible reserves), while the Ministry of Mines is quite optimistic that the potential figure will be much bigger.
The award of the PSCs will be conditional on an open, transparent and competitive bidding round.
The bidding round is likely to lead to the award and conclusion of PSCs, pursuant to which one or more pre-qualified bidder(s), acting separately, shall attain the exclusive right to explore for, and in the event of a commercial discovery, develop and produce, hydrocarbons in the blocks.
The road show was initiated in Kabul and visits Dubai, London, Calgary, Houston and Singapore. A bidders’ conference for pre-qualified prospective bidders may be held in Dubai in July 2009. The bid submission cut-off date is now set to Kabul on September 15, 2009 at 12:00 hrs.
In order to take part in the prequalification process, prospective bidders should specify their interest by submitting expressions of interest to the Ministry of Mines by June 15, 2009 at 12:00 hrs.
The requirements regarding qualifications are as follows:
All applicants must be qualified and eligible according to the hydrocarbons law articles 30 and 31.
Financial Qualification: The capitalization requirement is based on which block(s) a bidder will apply for
Bidders target –
-One oil block financial requirement – minimum $100 million market capitalization
-For the two gas blocks financial requirement – minimum $150 million market capitalization
-All three blocks financial requirement – minimum $200 million market capitalization
Technical Qualification: For the Juma-Bashikurd and Jangalikalan blocks, applicants must have knowledge in producing sour gas (gas with a hydrogen sulphide (H2S) content of 50 or more ppm.). For all blocks, the applicant shall present evidence of 1,000 boe of operated daily production.
Prospective bidders are informed that a non-refundable bidding fee of $25,000 is payable for each bidder no later than 10 days following an announcement of prequalification through the Ministry of Mines’ sub-account to the treasury single account in line with the Public Finance and Expenditure Management Law.
Payment of the bidding fee enables the prospective bidder to get the geological and technical data package and the pre-qualified prospective bidder to present bids. The buy of the geological and technical data package is exclusive, meaning that only the buyer is entitled to the use thereof.
Resale of the geological and technical information package, or in any other way making the information given therein available to a third party, is banned.
Applicants may, at their own risk, pay the bidding fee prior to the pre-qualification announcement, and thus get the geological and technical information package at an earlier stage. Earlier payment of the bidding fee is not prejudicial to the pre-qualification process.
Following the conclusion of the pre-qualification process, the pre-qualified applicants will be informing the pre-qualification and be welcomed to bid. Bidders may offer bids in the following three alternatives:
— Kashkari (Oil)
— Jangalikalan (Gas) and Juma-Bashikurd (Gas)
— All three blocks
Consideration of bids is also conditional on a bid bond to secure the preferred Bidders’ obligation to sign PSC. The bid bond is to be proposed in the form of a letter of credit amounting to $3 million, which is, upon a successful bid, to be replaced by a financial guarantee for exploration expenditures for 100% of the dedication and a general guarantee of performance.
