PALAU LEGISLATURE BACKS OCEAN OIL DRILLING

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By Bernadette H. Carreon

KOROR (Palau Horizon, Jan. 5) — Members of the 6th Olbill Era Kelulau (OEK) – Palau’s legislature – have approved a House Joint Resolution urging implementation of oil exploration in Kayangel.

The resolution supports a 2002 agreement between the Kayangel State and Palau Pacific Energy Inc. (PPE) that gave the oil company exclusive rights to conduct exploration, drilling and production operations in the ocean areas for petroleum during the terms of the exploration license.

The agreement said that the license would cover the period of 10 years commencing the effective date of the agreement.

The agreement also says that no later than May 15, 2006, PPE shall commence the drilling of an exploratory well within the Palau North Block.

PPE, according to the agreement will spend up to $10 million in the drilling of the said well.

The agreement said that failure to start operations would cause the agreement to terminate on May 15, 2006.

The House of Delegates approved the resolution last Dec. 30 while the Senate passed the resolution last Dec. 31.

The resolution, authored by Del. Florencio Yamada, said that despite the disagreement concerning the creation of the Palau National Energy Authority , still the people and elected traditional leaders of the Kayangel State supports the resolution.

"Further delay in the implementation of the agreement due to the inability of the OEK and the president to establish a national regime for the exploration for and exploitation of natural resources in the ocean areas of the Republic of Palau may result in the loss of the opportunity for economic development for the sate of Kayangel presented by the agreement," the resolution said.

January 5, 2005

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