Sheberghan Gas Generation Activity (SGGA) Monthly Report November 1 – November 30, 2014

The project is supported by the United States Agency for International Development (USAID) and the Government of the Islamic Republic of Afghanistan. The SGGA Monthly Report for November 1-30, 2014, highlights the project's progress and challenges. Drilling Contract Management Support was a key focus area for the SGGA in November 2014. Turkish National Petroleum Corporation (TPAO) submitted its progress report, which summarized the activities conducted between October 23 and October 30, 2014. TPAO also sent a letter to the Afghanistan Petroleum Authority (APA) discussing the reasons for delay, clarification to the contract, actual progress made, and TPAO's work plan. The SGGA prepared a termination paper for APA outlining the termination options and likely consequences of terminating for convenience versus terminating for cause. The SGGA also performed various tasks in support of the drilling contract management, including assembling documentation packages containing key correspondence between TPAO, the Ministry of Mines and Petroleum (MoMP), and USAID. The team translated an APA procurement committee recommendation on TPAO to the Minister from Dari to English and completed an analysis of DM Hares' response to USAID's letter on TPAO's breach of contract. Meetings were also a crucial aspect of the SGGA's activities in November 2014. The team met with Z. Sarwari and reviewed the SGGA termination summary paper containing termination options and consequences. They also met with Z. Sarwari and discussed the background of APA's recommendation to not terminate TPAO. A delegation from TPAO met with APA in Kabul, and the SGGA attended in an advisory capacity. The SGGA warned that USAID was near a decision to withdraw project funding, and TPAO asked what it would take to obtain the necessary time extension. The SGGA's activities were hindered by TPAO's failure to perform, which has seriously disrupted the objectives of the Sheberghan Gas Development Project (SGDP). The MoMP-APA staff lacks critical thinking skills, financial discernment, and the will to administer complex contracts. Despite this, the Afghan government is prepared to award TPAO the Totimaidan gas block. The SGGA has not been able to convince MoMP to make a rapid termination decision, which risks TPAO accumulating additional reimbursable charges and possibly mobilizing if a decision is not made soon. For the next month, the SGGA plans to continue coordinating with the MoMP and APA to address the issues related to TPAO's contract. The team will also prepare a scope of work and RFP for inspection and valuation of the Sheberghan Field roads, well site, and camp locations in anticipation of a dispute when the contract is terminated.