Rialto Energy has signed a new, amended Production Sharing Contract (PSC) for Block CI-202, located offshore Côte d’Ivoire
As announced by Rialto on 16 September 2013, the company signed a Memorandum of Understanding (MoU) with the Côte d’Ivoire Ministry of Petroleum & Energy, the state-owned oil and gas company PETROCI and Vitol to amend the existing PSC for Block CI-202.
The signing of the new PSC took place in Abidjan on 7 November 2013 and was signed by Adama Toungara, Côte d’Ivoire’s minister of petroleum and energy.
According to Rialto, the new PSC fulfils the major condition precedent to the completion of its previously agreed transaction with Vitol, under which Vitol will acquire 65 per cent of the shares in Rialto Côte d’Ivoire in exchange for providing US$50mn of loan capital for a Block CI-202 work programme.
Rob Shepherd, managing director of Rialto Energy, said, “The Vitol loan will fund the first US$50mn of the Gazelle Field development work programme (but excluding any exploration commitments, which will be funded pro-rata by Rialto and Vitol). The transaction formalises the partnership with Vitol, a company with substantial financial and technical capability, with existing assets in Rialto’s area of operations in Côte d’Ivoire and Ghana and a proven track record of monetising upstream assets in West Africa.”
According to Rialto, terms of the PSC include:
• three consecutive exploration periods over a total of seven years from signature;
• all petroleum costs incurred to-date by Rialto on Block CI-202 will be carried over for recovery in the new PSC;
• all remaining liabilities under the previous PSC have been deemed satisfied upon award of the new agreement;
• once the Field Development Plan for the development of Gazelle is approved by the Ministry, a new exclusive exploitation authorisation will be issued to replace the existing one;
• negotiations have recommenced with CI-Energies, the state-owned electricity company, regarding a future gas sales agreement;
• and the Ministry has ratified the entry of Vitol into partnership with Rialto.
Shepherd added, “Both the completion of the Vitol transaction and the signing of the new PSC remove the uncertainty, time constraints and financial obligations that were putting Rialto under significant pressure under the terms of the previous PSC and will enable us, along with our partners Vitol and PETROCI, to fully focus on the exciting development and exploration potential within the CI-202 block and beyond.”
