Sumatec: CaspiOil terminates joint investment pact with Sumatec

PETALING JAYA: Sumatec Oil And Gas LLP (SOG), a wholly owned subsidiary of Sumatec Resources Bhd has received a notice from CaspiOilGas LLP (COG) terminating its joint investment agreement and novation agreement effective Oct 17.In the termination notice, COG highlighted the constraints faced under Sumatec's current financial and legal predicaments which impacted SOG's ability to comply with its obligations to carry out appropriate investment/work programmes and to provide necessary funding for the petroleum operation under the joint investment agreement.According to Sumatec's filing with Bursa Malaysia, SOG will still have to confirm if it could still operate under the joint investment agreement, provide assurance whether Sumatec would be able to regularise its financial position and set aside the winding up petition, as well as to offer a credible plan on how to ensure the financing of petroleum operations at the Rakushechnoye field can continue smoothly in light of Sumatec's existing PN17 status."The board, after deliberation on the termination notice has resolved to seek the indulgence of CaspiOil from terminating the joint investment agreement and novation agreement as the board is in the midst of finalising a plan to regularise its PN17 status and remedy the winding-up petitions," it said in the filing.To recap, on March 8, 2012, Sumatec entered into a joint investment agreement with Markmore Energy (Labuan) Ltd and CaspiOil for the development and extraction of hydrocarbon in the Rakushechnoye oil and gas field.SOG was meant to carry out all operations related to the production of petroleum production, for and on behalf of CaspiOil, to study, appraise, develop, and produce the relevant petroleum reservoirs of the oil field.On Sept 26, 2017, Sumatec entered into a novation agreement with SOG, Markmore Energy and CaspiOil where SOG would accept and assume all of Sumatec's rights, title, benefits, interests, obligations and liabilities under the joint investment agreement.