Simba Energy (CVE:SMB, OTCBB:SMBZF) will hold talks with the National Oil Company of Liberia (NOCAL) in Monrovia in the week begining 18 July, to finalise the formal Production Sharing Contract (PSC) application.
The company has already received a draft PSC from NOCAL, and Simba is currently reviewing the document.
It is expected that next week’s negotiations will lead to the onshore PSC being issued.
"The meeting represents the final step in the process for the company’s application to convert its current exploration license into a PSC,” said chief executive Robert Dinning.
“We look forward to finalizing this application process so we can begin our planned activities and continue to contribute socially to the communities within our area of work.”
Simba applied, to NOCAL, to convert its current Hydrocarbon Reconnaissance Permit (NR-001) into a Production Sharing Contract (PSC) last autumn. Since then it has had extensive meetings with NOCAL to review, advance, and finalize the application.
The application process has been complicated during this period by changes to management at NOCAL and a moratorium imposed on offshore PSC applications.
The fact that Simba’s application is for Liberia’s first onshore PSC also meant that the process has taken longer, because there wasn’t a ‘model PSC’ for onshore oil.
While Simba is poised to be the first company to secure an onshore PSC it is by no means the only oil firm with activities in Liberia.
Just offshore are several exploration ventures, including major names like Chevron and Anadarko.
In the near term these major offshore projects could be the main driver for Simba’s shares, as a successful 2011 programme for the likes of Chevron could go a long way to de-risking the whole region, auguring well for Simba’s own PSA.
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