• 2 hours Senior Interior Dept. Official Says Florida Still On Trump’s Draft Drilling Plan
  • 4 hours Schlumberger Optimistic In 2018 For Oilfield Services Businesses
  • 6 hours Only 1/3 Of Oil Patch Jobs To Return To Canada After Downturn Ends
  • 9 hours Statoil, YPF Finalize Joint Vaca Muerta Development Deal
  • 10 hours TransCanada Boasts Long-Term Commitments For Keystone XL
  • 12 hours Nigeria Files Suit Against JP Morgan Over Oil Field Sale
  • 19 hours Chinese Oil Ships Found Violating UN Sanctions On North Korea
  • 24 hours Oil Slick From Iranian Tanker Explosion Is Now The Size Of Paris
  • 1 day Nigeria Approves Petroleum Industry Bill After 17 Long Years
  • 1 day Venezuelan Output Drops To 28-Year Low In 2017
  • 1 day OPEC Revises Up Non-OPEC Production Estimates For 2018
  • 1 day Iraq Ready To Sign Deal With BP For Kirkuk Fields
  • 1 day Kinder Morgan Delays Trans Mountain Launch Again
  • 2 days Shell Inks Another Solar Deal
  • 2 days API Reports Seventh Large Crude Draw In Seven Weeks
  • 2 days Maduro’s Advisors Recommend Selling Petro At Steep 60% Discount
  • 2 days EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
  • 2 days IEA: Don’t Expect Much Oil From Arctic National Wildlife Refuge Before 2030
  • 2 days Minister Says Norway Must Prepare For Arctic Oil Race With Russia
  • 2 days Eight Years Late—UK Hinkley Point C To Be In Service By 2025
  • 2 days Sunk Iranian Oil Tanker Leave Behind Two Slicks
  • 3 days Saudi Arabia Shuns UBS, BofA As Aramco IPO Coordinators
  • 3 days WCS-WTI Spread Narrows As Exports-By-Rail Pick Up
  • 3 days Norway Grants Record 75 New Offshore Exploration Leases
  • 3 days China’s Growing Appetite For Renewables
  • 3 days Chevron To Resume Drilling In Kurdistan
  • 3 days India Boosts Oil, Gas Resource Estimate Ahead Of Bidding Round
  • 3 days India’s Reliance Boosts Export Refinery Capacity By 30%
  • 4 days Nigeria Among Worst Performers In Electricity Supply
  • 4 days ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 4 days Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 4 days Saudis To Award Nuclear Power Contracts In December
  • 4 days Shell Approves Its First North Sea Oil Project In Six Years
  • 4 days China Unlikely To Maintain Record Oil Product Exports
  • 4 days Australia Solar Power Additions Hit Record In 2017
  • 4 days Morocco Prepares $4.6B Gas Project Tender
  • 5 days Iranian Oil Tanker Sinks After Second Explosion
  • 7 days Russia To Discuss Possible Exit From OPEC Deal
  • 7 days Iranian Oil Tanker Drifts Into Japanese Waters As Fires Rage On
  • 7 days IEA: $65-70 Oil Could Cause Surge In U.S. Shale Production
Alt Text

Did These Mining Giants Just Confirm The Next Gold Frontier?

After Ecuador’s President removed a…

Alt Text

Can Mali Maintain Its Gold Mining Status?

Mali could be about to…

Alt Text

Expect Mine Closures In This Key Gold Mining Nation

Major gold mining nation South…

Miners Shun Top Class Gold Assets In Egypt

Gold Egypt

I wrote in November about Egypt’s first gold licensing round in seven years. Noting that the geological potential is very strong in this under-explored part of the Arabian-Nubian shield.

But news this week suggests Egypt’s bid round is turning into a textbook of problems in the mining industry. Which may cause the licensing to draw zero bids from the global mining community — despite the big upside here.

Egypt’s biggest gold miner Centamin Plc confirmed to Bloomberg that it won’t make any bids in the licensing round. With fellow Egypt mineral operators Thani Stratex Resources and Aton Resources also saying they are unlikely to pursue new acreage.

The reason? Fiscal terms.

Sources said the new Egypt gold concessions are being offered under production sharing contracts with Egypt’s government. An arrangement very common in the global oil and gas industry — but exceptionally rare in mining (one of the only other nations holding onto production sharing in mining, Myanmar, recently scrapped that requirement as part of its 2015 mining law overhaul).

Egypt’s miners said that production sharing results in “an effective tax rate that is by far one of the highest for mining globally.” Making projects here unattractive — especially when exploration risk is layered on top of development burdens.

Reports also emerged of other big financial demands from the Egyptian Mineral Resources Authority (Emra), which is running the bid. Including up-front costs for data, as well as six-month bond of $50,000 required in order to submit a bid. Related: Why Cheap Natural Gas Is History

The contracts also reportedly require bidders to offer a series of bonus payments to the government. Including an upfront “assignment bonus” of $1 million.

That’s a very tough requirement, given that on-ground exploration expenditures for many projects total only a few million dollars in the initial years. Thus, the bonus payment effectively increases overall budgets by something like 25-50%.

This looks like an example of tough terms holding up exploration on good ground. Watch to see if any offers come in before the April 20 submission deadline — and to see if the Egyptian government will soften its stance should no one join the party.

Here’s to being reasonable.

By Dave Forest

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News