Contract area means the geographic area within the territory of sao tome and principe which is the subject of this contract and as described in schedule 1, as such area may be amended in accordance with the terms herein. The parties may place reliance on the actions of socar taken on. From the fgns perspective, given that some of these pscs were negotiated and entered into over 20 years ago, there is a need to update them to reflect current realities and also to. Production sharing contract will be brought into discussion. At the end, this dissertation will compare both regimes from a contractual perspective in order to answer whether it is really necessary to adopt a new regulatory framework based on a production sharing contract for the subsalt area in brazil. 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.
Production sharing contracts production sharing contract was pioneered in indonesia and was first used in agriculture which was later adopted for the petroleum sector. When it involves the period of gas sales agreement which is beyond the efective date of the contract, the extension may be. Delhi high court asks reliance industries, british gas to disclose assets on centre plea 21 dec, 2019, 01. Nigeria, indonesia, malaysia and equatorial guinea. Production contracts are important documents needed in a retail, agricultural or production company. Commercial production means production of crude oil or condensate or. Production sharing agreement psa is a contract between one or more investors and the government in which rights to prospection, exploration and extraction of mineral resources from a specific area over a specified period of time are determined. Maximization of returns and benefits are the major determinants state considers for adopting particular petroleum fiscal regime in the course of exploiting its petroleum resources. 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 agreement a guide or the oi and gas sector ased on eerience rom the asian egion 2012. Preamble 1 definitions 411 2 participating interests 12 3 license and exploration period 14 4 relinquishment 15 5 work programme 1618 6 management committee 1922 7 operatorship, operating agreement and operating committee 23 8 general rights and obligations of the parties 2425 9 government assistance 26 10 discovery. The sharing in production sharing contracts extends beyond oil and gas. Modeling chinas offshore production sharing contracts. 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. As a performancebased agreement, it is developed in malaysia for the malaysian people and private partners to. However, considering the inherent difficulties associated with joint. Condensate produced from block kgdwn983 kgd6 under the production sharing contract the psc dated 12 april 2000 entered into between them and the government of india. Production sharing agreements psas or production sharing contracts pscs are a common type of contract signed between a government and a resource extraction company or group of companies concerning how much of the resource usually oil extracted from the country each will receive. Indeed, the results showed that malaysia received the highest returns, followed by indonesia and equatorial guinea. It was first used in 1966 by the indonesias national oil company known as pertamina.
Natural gas or any combination of these from the contract area excluding. Production sharing contract overview production sharing contracts. Concurrently with signing this contract, westernzagros resources ltd. Psc is an agreement between the parties to a well and a host country regarding the percentage of oil and gas production each party will receive after the participating parties have recovered a specified amount of costs and expenses. Agreement or the agreement means this production sharing agreement executed between sonangol and contractor group, including its annexes. This gl o macs interactive training course on working in partnership joint venture and production sharing contract will provide the participants an ideal opportunity to improve and sharpen their skill sets in planning, negotiating and managing production sharing contracts pscs, joint operation agreements joas through interactive session with role playing, case studies, discussion groups. One of the main purposes of the production sharing contract system is to exert state control over the. Effective date means the first day of the month next following the month in which this agreement is signed by sonangol and contractor group. Two major fiscal regimes are adopted for exploiting petroleum resources.
It is a contract that specifies who supplies the production inputs, the quantity of the commodity to be produced and its quality, as well as the producers compensation. The production sharing contracts have been defined as a contractual relationship. Working in partnership joint venture and production. Psc production sharing contract kks kontrak kerja sama pwc pwc, which refers to a network of member firms of pwc international limited, each of which is a separate and independent legal entity. Sellers are parties to the production sharing contract psc with the. Psc is the acronym of production sharing contract psa may also be used to refer to production sharing agreement.
This contract is a production sharing contract, the scope of which is the exploration, appraisal, development and production of hydrocarbons in the contract area and the supply of required infrastructure within and outside of the contract area up to the delivery point, all at the contractors sole risk and expense. But an industry report said it could be the next decade by the time any new oil or gas is actually. Revenuesharing arrangements in production sharing agreements illustrate this point vividly. If you continue browsing the site, you agree to the use of cookies on this website. Working in partnership joint venture and production sharing. Modeling chinas offshore production sharing contracts using. Abbreviations 4 preamble 5 article 1 definitions 6 article 2 scope 12 article 3 contract area article 4 contract term 14. Joint venture agreement jva and production sharing contract psc. Rfp, bidders manual and the responses to the faqs as provided on the. On the other hand, the findings justified the underlying hypothesis of socioeconomic factors help shape the terms and conditions of oil and gas contracts in developing countries particularly production sharing contract. First implemented in malaysia, the risk sharing contracts rsc departs from the production sharing contract psc first introduced in 1976 and most recently revised last year as the enhanced oil recovery eor psc which ramps up recovery rate from 26% to 40%. An example is the kenyanmodel9 which provides as follows at clause 2. Under production sharing contract production is divided between government and the contractor after allowing, a lower rate of royalty and cost recovery.
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. Contract area means the area specified in article 3 hereof and delineated on the map set out in annex a, as modified and reconfigured from time to time in accordance with the stipulations of this contract. Download limit exceeded you have exceeded your daily download allowance. Government revenues from opl 245 assessing the impact of. Contract means this production sharing contract, including its recitals and schedules. While investment flows to the petroleum sector are determined to a large extent by geological prospects, attractive petroleum legislation also has a positive. A contractual agreement between a contractor and a host government whereby the contractor bears all of the exploration costs and risks and the development and production costs in return for a stip. 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. A comparative analysis of production sharing contracts of selected developing countries. 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. A variety of psc terms are designed to encourage an optimal level of investment based on the complexity of petroleum resources. Model production sharing contract under the petroleum act. On 28 august 2018, the company has entered into a contract of.
Structure of production sharing contracts the legislative framework is a key component for exploration and development of petroleum reserves through which a government policy with respect to petroleum sector are normally reflected. Production sharing agreements vs service contracts from. The first production sharing contract was signed by iiapco in august 1966, with permina the national oil company of indonesia. Production sharing contracts pscs the pscs are more common in the present day oil and gas contracts, and are being used by at least 60 per cent of oil producing countries. Renegotiation of nigerias production sharing contracts. Revenue sharing contract rsc is a term used in the hydro carbon industry and refers to an agreement between contractor and government whereby contractor bears all exploration risks, production and development costs in return for its stipulated share of revenue resulting from this effort. How to scrutinise a production sharing agreement a guide or the oi and gas sector ased on eerience rom the asian egion 2012. An analysis of comparative practicein certain african jurisdictions. Through pscs, our partner bear exploration, development and production costs in return for an agreed share of production.
Appendix a description of the contract area 79 appendix b map of the contract area 80 appendix c accounting procedure to the contract 81104 appendix d calculation of the investment multiple for production sharing purposes 105106 appendix e1 form of parent company financial and performance guarantee 107108. Production sharing agreements psas or production sharing contracts pscs are a common. Pscpsa product sharing contractagreement concession taxandroyalty participationjoint ventureassociation service contract what is a psca. This agreement, made and entered into in baku, the azerbaijan republic, this 4 day.
The contract was later adopted by a number of countries like peru, malaysia, guatemala, libya, egypt, syria, jordan, bangladesh and philippines. International association of drilling contractors iadc drilling safety manual. Contract extension proposed to the minister through bpmigas within 10 to 2 years prior to the original contract expiry date. Production sharing contract royalty payment petroleum. Revenue sharing arrangements in production sharing agreements illustrate this point vividly. Exploration opportunities production sharing contract overview. Interested bidders are requested to download the rfp and the gspa from. Production sharing agreements psas for yemen blocks 34 and 37 were terminated on 5 october 2015. The fundamental distinction between psc and rt regimes lies in the. Cost petroleum means the portion of the total volume of petroleum.
Production sharing contracts have been used in the development of chinas offshore petroleum resources since 1982, but the mechanism in which the fiscal terms impact project economics is. A comparative analysis of production sharing contracts of. Productionsharing agreements psas are among the most common types of contractual arrangements for petroleum exploration and development. Production sharing contract free download as powerpoint presentation. Production sharing contracts advanced master class module 1. Production sharing contract slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Productionsharing deals and iraqs oil money oil companies are in a highstakes competition to nail down lucrative contracts in iraq. On behalf of the sellers we invite bids under single stage two bid system from eligible bidders having the. The early concession system gave the host government no say in the exploration and production program.
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