PALAU DELEGATE CHALLENGES OIL DRILLING LEASE

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Cites failure to ratify by Kayangel State legislature

By Aurea Gerundio-Dizon KOROR, Palau (Island Times, Aug. 1, 2011) – In Palau, Kayangel Del. Noah Kemesong declared that the third amendment to the lease agreement between Palau Pacific Energy Inc. (PPEI) and Kayangel State that includes extension of time for PPEI to conduct exploratory drilling for oil and gas is void as it was not ratified by the state’s legislature.

[PIR editor’s note: Out of 16 Island states, Kayangel is the northern most state of Palau with an approximate 200 residents. Palau Pacific Exploration is an oil and gas exploration company from Australia with offices in Houston, Texas and Brisbane, Australia]

Kemesong wrote to Gov. Edwin Chiokai yesterday stating that he had been requested by many Kayangel people to review Resolution No. 14-10-4SS to ratify the Third Amendment and 2002 Lease Agreement.

His review of the resolution reportedly showed that the Third Amendment is void. Kemesong said the 2002 Lease Agreement was terminated already in 2008 before the Third Amendment was signed on May 11 this year.

Kemesong said the journal of the state legislature’s session showed the resolution was not approved pursuant to the state constitution that requires ¾ of the members of the legislature to approve the agreement entered into by the state.

"The vote on Resolution 14-10-4SS on May 13, 2011 to ratify the Third Amendment failed to achieve ¾ of the members of Kayangel State Legislature and I am told that there was reconsideration on May 15, 2011 by the Kayangel State Legislature which also failed to muster ¾ of the members of Kayangel State Legislature," Kemesong said.

Kemesong told Chiokai in the letter to advice PPEI not to take any action to commence any activities relative to oil operation in Kayangel State and advice them that Third Amendment was not ratified.

Earlier reports showed that in May, Kayangel Government received its first check from PPEI in the amount of US$44,000 for the oil and gas exploration project within its state.

The payment was reportedly part of the agreed US$100,000 for the ratification of the third amendment to the Kayangel-PPEI license agreement, which was extended from May 15, 2011 to December 31, 2012.

Following the first check, PPEI will reportedly continue paying Kayangel on a monthly basis with US$5,500 until the US$100,000 is reached.

Island Times © 2011 Island Times. All rights reserved

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