EMAIL DETAILS

Devon D. Archer

Begin forwarded message:

> From: Corrado Cusano <corrado.cusano@medtag.net>
> Date: August 6, 2016 at 8:24:47 PM EDT
> To: "darcher@rosemontseneca.com" <darcher@rosemontseneca.com>, Schwerin Eric <eschwerin@rosemontseneca.com>
> Subject: Memo
>
> Dear Devon,
>
> After you asked me to look into the situation with delays over Burisma's permits to start the Tuscany projects acquired from Gesto, I carried out an assessment, which shows a myriad of small and challenging impediments that this initiative has experienced. Of course as you know, Italy is one of the world leaders in geothermal energy and Tuscany is a center of the country's geothermal potential. You are aware of a multitude of permits for research issued, a few overlapping in competing territories. There are more than a dozen active developers, almost all Italian, including majors - Enel and Enel subsidiary. In addition, Gesto projects have the peculiarity of being under different authorities - regional and federal. This creates additional tensions and complications concerning governance and conflicting interest working in many directions.
>
> I have talked to a small group of competent friends about the problem, and they share my assessment that the situation can be salvaged and a successful outcome delivered, and they have offered to help to this end. This will take effort and resources.
>
> What they propose is a few steps.
>
> 1. Initiation
>
> I need to hire and dispatch a number of experts to collect all the detailed information about various vested interests involved in the process that could be creating tensions or conflicts. This includes also intelligence collection to drill down to top issues, which they need to be able to define to the level of being able to also put forward a solution. Part of this exercise will include assessing other operators in the region and on same fields may be, as there could be a potential with in fact enlarging the planned scope of the project.
>
> This stage wil require EURO 250,000 in expenses, to be paid as soon as there is a decision to move forward. We can discuss how to organise this.
>
> 2.Mazolla Project
>
> They will work first to address issues related to the Mazolla Project, an easier matter to solve first, given that it is under regional competency. There will need to be a service agreement between Bursima and a service provider for a success fee in the amount of EURO 2.5 million upon the issuance of all required permits for Burisma to be able to start operating in the field. This will involve: facilitating the approval process within respective governance bodies; advocating for Burisma as an important foreign investment in Italy; etc.
>
> It is possible that the success fee would need to be split into two payments: EURO 1 million upon receipt of a full commitment by authorities to clear all remaining impediments for issuing the required licenses to the satisfaction of Burisma; and EURO 1.5 million upon the actual issuance of the permits. I will try to avoid this, but it may be necessary.
>
> 3. Montenero Project
>
> While the service company will start in parallel working on both projects, Mazolla is expected to move first and they would use that fact in forcing the approvals of the Montenero Project at federal level. There will need to be a service agreement between Bursima and the service provider for a success fee in the amount of EURO 2.5 million upon the issuance of all required permits for Burisma to be able to start operating in the field. This will involve: facilitating the approval process within respective governance bodies; advocating for Burisma as an important foreign investment in Italy; etc.
>
> It is possible that the success fee would need to be split into two payments: EURO 1 million upon receipt of a full commitment by authorities to clear all remaining impediments for issuing the required licenses to the satisfaction of Burisma; and EURO 1.5 million upon the actual issuance of the permits. Again, I will try to avoid this, but it may be necessary.
>
> 4. Additional Opportunities
>
> It is possible that in the course of this engagement, they discover additional investment opportunities for Burisma. This could include, for example, buying more permits from other operators. They would like to agree with Burisma on a 'finder' fee agreement for such opportunities, if they are of course enacted by Bursima, at 2% of the amount of the investment by Burisma into such additional opportunities. They are not insisting on this at all, just offering it is an option for Burisma to consider.
>
> It's worth bearing in mind that the current political situation favours a successful outcome and will do so for the next 4 months, so, given the work involved, the sooner we get started on this the better.
>
> All in all I think the objective is worth it - this is a premier development project, like the 'Ferrari' of geothermal projects. And it's about access to Italy and EU markets, and a major addition to any company's CV.
>
> I'm available anytime to talk.
> My mobile is +393356205674
>
> Ciao
> Corrad