South Africa

What’s going on? Warning – this presentation is characterised by an absence of seismic sections, well logs etc.

Stephen Mills Legal Compliance Manager

Last time – Dallas? Technical team Block 1 New law

Technical difficulties in implementing the new law. What’s changed ? Not the geology! Not the personnel. Technical difficulties in implementing the new law.

What’s are we doing about it? Working with national Department of Minerals and Energy and National Treasury to get fiscal incentives approved. Pressing for more practical forms of agreement. Removing technical obstacles to granting new E & P rights offshore.

Status Quo Processing applications for conversion of ‘old order’ rights Processing applications for new permits and rights onshore Regulating offshore operations

Recent / imminent op's Seismic survey over Paddavissie prospect in Block 11B/12B (CNR) Drilling of first deep-water tests in blocks 3B/4B (BHP Billiton) and 2C (Forest) depending on rig availability PetroSA embarks on programme to develop small gas fields as feedstock for proven GTL plant

Next ? Licensing round - towards the end of this year? Focus on northern part of West Coast (Orange Basin) Other acreage accessible on a ‘first come, first served’basis September 25-29, Johannesburg

More information? www.petroleumagencysa.com

Fiscal aspects

Major Elements Royalty Tax cap Recovery of capital Ring-fencing Customs duties Foreign exchange