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The Latvian government is entitled to a royalty equal to 15% of the value of the amount of oil produced on a monthly
basis and 10% of the value of the amount of gas produced on a monthly basis. A corporate tax of 15% is applied to the
Group’s taxable profit in Latvia.
Pakistan
Summary
In Pakistan, the Group currently has no production and has a working interest in two licences in Pakistan: Kunri Block
and Jherruck Block, which are governed by PSCs.
The Group has ceased to incur any capital expenditures or pursue new projects in Pakistan, and is currently seeking
attractive opportunities to sell or monetise the value of these assets or otherwise exit Pakistan, in order to reduce its
overall exposure outside of the core MENA region and to reduce the extent of management attention and Group financial
resources that are devoted to these assets.
The Group manages its activities in Pakistan from its office in Kuwait. The working interests of the Group and its JV
partners in the assets it holds in Pakistan as at the date of this Offering Memorandum are as follows:
EPSC
Fiscal
regime
(1)
JV partners
Revenue interest
(%)
(2)
Cost
interest (%)
(3)
Kunri..............
PSC
Kuwait Energy
40.00
40.00
New Horizon Exploration and Production
Limited
60.00
60.00
Jherruck .........
PSC
Kuwait Energy
40.00
40.00
New Horizon Exploration and Production
Limited
30.00
30.00
Pakistan Petroleum Limited
30.00
30.00
(1) PSC = Production Sharing Contract.
(2) Revenue Interest is the percentage interest of the Group in the revenues derived from sale of production from an asset, before taking into
account any taxes, fees, royalties or other payments.
(3) Cost Interest is the percentage contribution of the Group to the exploration, development and operating costs for an asset, before taking into
account contractual cost recovery available to the Group, if any.
Resource data
GCA reports that the Group’s Pakistani assets include 0.9 Bscf (0.2 mmboe) of 1C (low estimate), 1.6 Bscf (0.3 mmboe)
of 2C (best estimate), and 2.3 Bscf (0.4 mmboe) of 3C (high estimate) contingent gas resources on a working interest
basis as at 31 May 2014, all of which are located in the Jherruck block.
Exploration and appraisal assets
Kunri
The Kunri block covers a gross area of 2,484 km
2
and is located in the lower Indus Basin. The Group’s working interest
in the licence for the Kunri Block is 40%, held through a PSC entered into with the Islamic Republic of Pakistan in 2007.
The Group’s JV partner is New Horizon Exploration and Production Ltd (“
NHEPL
”), which holds a working interest of
60% and is the operator of the PSC. The PSC is in the first phase of the exploration period, and the government has not
yet responded to a request by NHEPL to extend the exploration phase of the PSC.
