International petroleum fiscal systems and production. Difference between concession and production sharing agreements. The principal objective of psc audit is to provide assurance to the minister that contractors are in compliance with the production sharing contracts. The oil production sharing agreements are here for you to browse in full. Operation and maintenance of farm to operate this farm efficiently and to maintain it in a high state of productivity, the parties agree. International petroleum exploration and exploitation. Natural gas or any combination of these from the contract area excluding. Doc production sharing contracts vs service contracts from the. An example is the kenyanmodel9 which provides as follows at clause 2.
Agreement any arrangements, understandings, promises or agreements made or existing between the partners hereto, prior to, or simultaneously with the agreement and constitutes the entire understanding between the partners hereto. Italys eni signed 2 production sharing contract with ministry of energy august 4, 2014 by thiha italian energy firm eni, following its participation in the heavilycontested international bidding for myanmars onshore blocks, signed two production sharing contracts psc with the ministry of energy for rsf5 and psck onshore blocks in nay. Production sharing agreements vs service contracts from. A variety of psc terms are designed to encourage an optimal level of investment based on the complexity of petroleum resources. Johnston 1994 presented and investigated the contract elements of psc in detail in. The fundamental distinction between psc and rt regimes lies in the. Production sharing contracts production sharing contracts or agreements psc hereafter are ubiquitous in much of asia, africa and the middle east, with only a handful of countries in these regions adopting a royaltytax or concession rt regime or some hybrid. Production sharing agreements production sharing agreements psa are among the most common contractual. This study aims to compare expected returns from exploiting petroleum resources of selected countries nigeria, indonesia, malaysia and equatorial guinea that have adopted theproduction sharing contracts. An investor is allowed to recover costs of production. Additional agreements related to grain hauling, storage, and marketing are. Today they are often used in the middle east and central asia in production sharing agreements the countrys government awards the execution of exploration and production activities to an oil company. Pdf techniques of developing the economic clauses of a. Application for production sharing agreement to allow horizontal wells to cross lease lines page 1 as of oct 5, 2018.
Model production sharing contract under the petroleum act. A comparative analysis of production sharing contracts of. Under these arrangements, the nnpc is the holder of the concession while the ioc is the contractor. Production sharing contract dated this agreement is a production sharing contract made under the petroleum act between the, acting on behalf of the democratic republic of timorleste the ministry and and each a contractor and collectively, the contractors. Production sharing agreements were first used in bolivia in the early 1950s, although their first implementation similar to todays was in indonesia in the 1960s. Additional details may include product prices, when the payments will be made, what the payments are based on, payment method, commission percentages, and if there is a limit on the amount of commission that a seller can make.
Hydrocarbons law, which allows for agreements to be entered into between the. Skyner, dentons the sakhalin ii psa a production non sharing agreement. When it involves the period of gas sales agreement which is beyond the efective date of the contract, the extension may be proposed at a sooner date. The definitive guide to petroleum production systemsnow fully updated with the industrys most valuable new techniques petroleum production systems, second edition, is the comprehensive. Uganda oil uganda production sharing agreements oil. Agreement or the agreement means this production sharing agreement executed between sonangol and contractor group, including its annexes. Effective date means the first day of the month next following the month in which this agreement.
However, in contrast to production sharing contracts, in a service contract the iocs. Together with partners in lower and middleincome countries, iied has been working to strengthen local and national capacity to examine contractual issues with a sustainable development lens. Pdf the authors experience in developing terms of production sharing agreements for certain oil and gas projects in krasnoyarsk krai is. In a service contract, similar to a production sharing agreement, the closest legal framework, the international oil company brings the technology and makes the upfront capital investment. The production sharing contract psc was widely introduced in 1993 to address some of the issues faced by the joint operating agreement joa and also to provide a suitable agreement structure for encouraging foreign investment in offshore acreage.
Apart from that, the production sharing agreement, mining development agreement, and community development agreement are also the essential types of modernday contract mining agreements. Free sales commission agreement template pdf sample. Productionsharing agreements oxford institute for energy. Pdf on structuring offshore hydrocarbon production sharing. The government of uganda has signed production sharing agreements with oil companies prospecting and showing interest in production of oil in uganda. An analysis of comparative practicein certain african jurisdictions. Under a psa the state as the owner of mineral resources engages a foreign oil company foc as a contractor to provide technical and financial services for exploration and development operations. Failing such agreement, the contractor and the national petroleum agency shall each submit a proposal to an expert appointed by the world bank and such. Royalty, therefore, becomes a part of total net revenue of the state from the 1 according to the federal law no. Offshore petroleum exploitation and international law. Productionsharing agreements psas are among the most common types of contractual arrangements for petroleum exploration and development.
Production sharing agreements, as well as royaltytax systems and service agreements will be provided. Subsequently, it will look at the main features of concessions by analyzing the brazilian regulatory framework for oil activities. A psa is an agreement between the parties to a well and a host country regarding the percentage of production each party will receive after the participating parties have recovered a specified amount of costs and expenses. State and foreign investors in the form of a production sharing contract, through.
Here is a picture of the first commercial oil well in the world, the drake well, drilled in titusville, pennsylvania. Kursky, state duma committee for industry, construction, and hightech the state as a contracting party. This music producer contract this music producer contract is the sole and complete agreement between name of producer, with an address at address hereinafter referred to as the producer and name of artist, with an address at address hereinafter referred to as the artist for the producers services in producing master. Production regulations, 1969 with amendments in 1973, 1979, 199 5, 1996 and petroleum amendment decree 1996. A literature based methodology was adopted, and indeed, data were gathered from the psc treaties and. Production sharing agreements concession and contract fiscal systems elements of production sharing contracts pscs, including cost oil and profit oil financial accounting for pscs nonrisked and risked service contracts group case studies for production sharing contracts register for this course now. Production sharing agreements psas are among the most common types of contractual arrangements for petroleum exploration and development. A sample of the agreement can be downloaded from below. Under a psa the state as the owner of mineral resources engages a foreign oil company foc as a contractor to provide technical and financial services for exploration and. Through pscs, our partner bear exploration, development and production costs in return for an agreed share of production. Commercial production commencement date means the date on which the first regular shipments of crude oil or first regular deliveries of gas are made. Before issuance of an agreement, the following must be received by university lands.
Article ii annexes to the agreement annex a is a description of the area covered and affected by this agreement. Commercial production means production of crude oil or condensate or. Deep offshore and inland basin production sharing contracts decree n o. Under a psc the contractor group bears the mineral and financial risk of exploration, and the state is permitted an ownership participation interest, when and if, it has been agreed, that any hydrocarbon discoveries within the. The leak in july 2014 of an important addendum to a production sharing agreement psa between statoil and the government of tanzania has ignited a debate on whether tanzania got a good deal from granting these extraction rights for a block now expected. Product sharing agreements psa in the russian mining industry a. Show full abstract makes the contracts more flexible, allows to adapt production sharing agreements to any type of fields, to. This profit sharing agreement template is written in a manner so that it can apply to a situation whereby a company has hired someone to market a product for them and offered a share of the profits on the sale of the product. This agreement will explain what kinds of commission payments will be made to the person selling products, or the employee. For this licensing round, the government has published a new 20 model production sharing. The psas have been a matter of public concern with many people calling upon the government to make them public. Great expectations arose in connection with the preparation of a law on production sharing agreements psas. Revenue sharing arrangements in production sharing agreements illustrate this point vividly.
84 1358 425 1338 1226 1496 783 1437 875 873 857 833 1193 1030 1097 468 499 490 1429 139 1518 138 719 655 996 453 216 253 1389 795 608 947 1269 643 1476 748 445 140 564