Sheberghan Gas Generation Activity (SGGA) Monthly Report September 1 – September 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 September 1-30, 2014, highlights the project's progress and challenges during this period. Drilling Contract Management Support was a key focus area for SGGA in September. Turkish National Petroleum Corporation (TPAO) proposed significant changes to the drilling contract, including a 90-day extension and major changes to several contract terms. However, the Ministry of Mines and Petroleum's (MoMP) Afghanistan Petroleum Authority (APA) promptly rejected the proposal with support from SGGA. Instead, MoMP unilaterally issued a 30-day extension to TPAO, which TPAO complained was not sufficient for mobilization. SGGA drafted a suggested response to TPAO's letter, highlighting its breaches of contract and refusal to meet the contract schedule. Quality Control was another area of focus for SGGA. The team reviewed TPAO's progress report and provided feedback to APA, noting that TPAO had not completed its construction works. SGGA also analyzed TPAO's insurance statements against contract requirements and found that the insurance met contract requirements. To ensure compliance with the drilling contract's logistics requirements, SGGA drafted a letter for APA to request the USAID-required determination of non-availability of US-flagged vessels in the Caspian Sea. USAID confirmed non-availability, enabling TPAO to move equipment across the Caspian Sea with a non-United States flagged vessel. SGGA held several meetings with APA officials and USAID representatives in September. The team met with APA's Director General, Dr. Anwar, and Project Manager, Z. Sarwari, to discuss TPAO's new insurance policy submission and extension alternatives for TPAO's expiring time for completion period. SGGA also attended the September Sheberghan Gas Development Program (SGDP) Three-Party Meeting with USAID representatives and APA officials to discuss TPAO's latest progress. The project faced several challenges in September, including TPAO's continued poor performance and its unwillingness to mobilize without a 90-day extension. This may result in the inability to complete new well data for the Juma-Bashikurd Field in time to include new data in any reserve study. Additionally, operations may conflict with the Totimaidan tender if APA awards the tender on schedule. Security challenges also confronted SGGA in September, including the abduction of two Pakistani nationals working for TPAO's civil works contractor and their Afghan driver, who was later killed.