SGDP Monthly Drilling Operations Progress Report

The project aims to develop the Juma-Bashikurd Field in Jawzjan Province, with a projected end date of April 30, 2015. Turkish Petroleum Corporation (TPAO) was awarded a $36,757,766 contract on December 14, 2013, to drill one new well, Juma #2A, and re-enter two wells, Bashikurd #3 and Bashikurd #9. During the reporting period of December 1-31, 2014, several key activities took place. On December 1, 2014, a meeting was held between SGGA, Afghanistan Petroleum Authority (APA), and TPAO to discuss options for extending TPAO's contract performance time. On December 2, 2014, a meeting was held between TPAO, APA, and USAID to discuss the options for extending the performance period and continued USAID funding for the contract. On December 5, 2014, TPAO submitted a revised schedule extending the performance period to August 7, 2015, from the previous scheduled completion of May 21, 2015. TPAO also offered to fund a reserve study for the Juma-Bashikurd Field. On December 7, 2014, TPAO and MoMP reached an agreement to extend the contract performance period to August 7, 2015. MoMP sent a request to USAID for consent to modify the drilling contract, but as of the end of the reporting period, USAID had not acted on this request. On December 20, 2014, the last day of work for approximately 72 APA contract employees, whose positions were eliminated in the new national budget. This will leave only some thirty-five employees at APA. As of December 20, 2014, it appears that MoMP is not in compliance with IL-45-01, since the assigned project manager is no longer employed by APA, the required management, evaluation, and reporting committee has ceased to function, and no reports have been submitted. On December 23, 2014, TPAO sent a written request to APA for APA's "urgent" support for customs clearance, as TPAO has a number of trucks in Aquina customs zone but is unable to clear them. SGGA provided references to the contract terms placing responsibility for customs matters on TPAO and made recommendations to APA on possible solutions. Despite customs problems, TPAO continues to operate. On December 28, 2014, conversations and e-mails with APA reveal that TPAO is only now providing copies of the contract and other documents to Customs that indicate the drilling contract is being funded by USAID. It appears from this request that TPAO failed to submit the necessary application and supporting documents for duty-free customs treatment before attempting to pass customs with a large number of trucks. SGGA provided contract references and copies of relevant documents. On December 30, 2014, TPAO was reported to have brought its duty-free customs applications to APA for confirmation before submitting them to Customs. On December 31, 2014, TPAO submitted 39 trucks exemption forms out of 243 trucks to be signed by APA. The project's implementation is being monitored by SGGA, which is responsible for ensuring that the project is implemented in accordance with the contract terms and USAID's requirements. The project's progress is being reported to USAID on a monthly basis, and SGGA is working closely with APA and TPAO to resolve any issues that may arise during the implementation of the project.