The “Show” review and opinion by Laurinda Seabra
On 19 July 2015, the government was obliged to publish all fossil fuels contracts already signed and to transpose into Portuguese law the Directive 2013/30/EU of the European Parliament and of the Council of 12 June 2013 on safety of offshore oil and gas operations, which they failed to do.
The EU directive was transposed into Portuguese law only on 9 March 2016, after the Portuguese government was notified by the EU in February 2016 that it had two months to transpose the law, failing which the Portuguese government would be sued in the European Court of Justice.
All the contracts where published on the ENMC site on 14 August 2015. Copies of first documents relating to the Lagosta and Lagostim contracts were published by the ENMC and they can be found here (Lagosta) - and - (Lagostim). The documents released where copies of the original contract signed on 21 October 2011 between Portuguese government and the consortium Repsol / RWE, and an Addendum signed on 13 September 2012 between Portuguese government and the consortium Repsol / Partex.
In the morning and in preparation for this meeting in Portimao, I checked all the contracts hosted on the ENMC site to see if there were any changes or amendments to contracts. I downloaded once again all the zipped files from ENMC site and found NO changes.
To test how “awake” the locals are. Do they read and understand the contracts? Do they know what it means? Can they fool the people into accepting these poor terms? (10 cents and 25 cents a barrel). Because if they are successful, it will set the terms and conditions for the next contracts to be signed by the Repsol / Partex consortium.
This strategy would reflect comments made often to the press by Partex’s CEO “ that the terms of the contracts are very fair because Portugal is a non-producing country”, this comment was also expressed in writing by ENMC to ASMAA in January 2016. Interesting to see the industry regulator a.k.a ENMC and Partex speaking as one voice.
During the meeting of 14 July 2016, I referred to the fact, that the poor benefits that Portugal would receive from contracts signed where unacceptable, and referred specifically to the 10 cents and 25 cents per barrel written in above-mentioned contracts. (Lagosta and Lagostim)
One of the representatives from ENMC proceeded to inform all of us present that IT WAS NOT TRUE that the Repsol/Partex price per barrel was 10 and 25 cents in the contracts, but that they where instead a percentage. I was told I was uninformed ... (aka: I didn't know what I was talking about)
I argued the point as I had checked their site that very same morning. And put them to the proof thereof.
On return to our offices in Lagos, I once again visited the ENMC site with the intent to check the contracts once more, and posted about it on Facebook. (below)
I was surprised to find the section relating to the contracts offline.
The contracts where back on line on the 21 July 2016.
What was the reason that it took the ENMC one week to publish the contracts again on their website?
(This was the only section of the ENMC site that went offline on the 14 July after questions were raised)
But amazingly there was a new addendum to the original contract.
Now things really start to get really interesting. The original contract was signed on 21 October 2011 at 8h30 am, the “NEW ADDENDUM” was signed on 21 October 2011 at 9h00 am. (Document annexed below)
Let’s analyse this very unusual procedure.
- It’s normal during signature of contracts that if there are changes happenning on the same day because the parties agree to it, these changes are normally done to the original contract and not as an addendum to a contract.
- Then we need to look at the time of signature. So one contract is signed, and half an hour later there’s a newly typed, checked and verified by all parts addendum to the contract?
- Was the contract “pre-signed” and just dated? Where the addenda backdated?
- In the document that we downloaded there are two blank pages with a rubric in the left corner? Why the blank pages?
- And what was the reason that took the ENMC from August last year to ONLY now present these “old” addenda to both contracts?
We need to remember that the same subject was raised by ASMAA in writing at the meeting held by the ENMC on Jan 12 in Faro, and that plenty of ink has run in social media platforms and in the press about the 10 and 25 cents per barrel.
Now what are the changes that the addendum brings?
Article 19 now indicates that the benefits for the state are 5% for first 5 million barrels, 7% between 5 and 10 million barrels, and 9% for barrels thereafter.
There’s a new annexure to the contract as well. Annexure IV which combines the operational requirements for the Lagosta and Lagostim concessions into a single area. But the really interesting addition can be found in clause c of annexure, which states and I quote:
“ Minimum requirements: c) Will be accepted delays in meeting the minimum operational requirements such as seismic surveys, exploration drillings in any of the concessions, when technical or logistical reasons are provided by the concessionary and substantiated in any form or manner. (Examples include lack of availability of equipment, sonar’s, boats)
I had to read the annexure twice to really believe my eyes.
Lot’s of questions are raised by this new set of events that we have no answers to, but we are of the opinion that the appropriate authorities and the government should launch an independent forensic investigation into these new findings.
The question on my mind is, is there the political will to do what is right?
There's more ... but that will be continued in Act III.
You can read the addenda in attachment section below (Portuguese)