When it involves the period of gas sales agreement which is beyond the efective date of the contract, the extension may be. Production sharing contracts production sharing contract was pioneered in indonesia and was first used in agriculture which was later adopted for the petroleum sector. 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. Such crops as fruit, vegetables, and sugar beets and cane are mostly produced under contracts. 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. Type two pscs history of the psc example states introduction to the key components of the psc day 4.
Petroleum operations shall comply with the safety standards of the contractor. As per model psa of 20, percentage shares are as shown in the table below table1. 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. Through pscs, our partner bear exploration, development and production costs in return for an agreed share of production. A variety of psc terms are designed to encourage an optimal level of investment based on the complexity of petroleum resources. Production sharing agreement a guide or the oi and gas sector ased on eerience rom the asian egion 2012. Production sharing contract will be brought into discussion. 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%. Application for production sharing agreement to allow horizontal wells to cross lease lines page 1 as of oct 5, 2018. 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. 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.
As a performancebased agreement, it is developed in malaysia for the malaysian people and private partners to. The principal objects of psa master data are the production sharing contract psc, and the product, which is an object that represents a hydrocarbon substance, such as oil or gas. Productionsharing agreements oxford institute for energy. In order to proceed, the oil and gas company must obtain the consent of the royalty interest owners. It is liquid at the standard conditions of temperature and pressure 60 degrees fahrenheit and 14. A production agreement is a specific type of service agreement whereby one entity, the production services provider or producer, contracts to produce an art or media project for the client. However, in contrast to production sharing contracts, in a service contract the iocs.
Production sharing agreements international monetary fund. Production agreements can be between large entities, like two big companies, or they can be individualtoindividual in other words, a small client hiring a small producer. This contract is a productionsharing contract in accordance with the provisions contained herein. The contractor shall a be responsible to the government for the execution of the petroleum operations contemplated hereunder in accordance with the provisions of this. Exploration opportunities production sharing contract overview. Model production sharing contract under the petroleum act. Production sharing accounting system sap help portal. Effective date means the first day of the month next following the month in which this agreement is signed by sonangol and contractor group. S embassy jakarta 1 executive summary indonesia ranked twentyfirst among world oil producers, with approximately 1.
This contract is a production sharing contract, in accordance with the provisions herein contained. Production sharing agreement psa is a contract between one or more. How to scrutinise a production sharing agreement a guide or the oi and gas sector ased on eerience rom the asian egion 2012. Psc is the acronym of production sharing contract psa may also be used to refer to production sharing agreement. In 2006 indonesia produced an average 1,005,810 barrels per day bpd of petroleum crude and condensate, according to government figures. Production sharing fiscal scheme for petroleum in which production at a surface delivery point is shared between a state entity and a private contractor psc or a production sharing contract or agreement prrt petroleum resource rent tax profit oil balance of. Top five questions about production sharing agreements. Major recommendations such as moving to revenue sharing model from current cost recovery in order to. The 7th edition captures the latest tax and regulatory changes that have occurred in the oil and gas industry during the past two years. Contract extension proposed to the minister through bpmigas within 10 to 2 years prior to the original contract expiry date.
Object of the contract the object of this contract is the definition, in accordance with the petroleum activities law, and other applicable legislation, of the contractual relationship in the form of the production sharing contract between sonangol and contractor group for carrying out the petroleum operations. Production agreement sample, template word and pdf. Operations in furtherance of a production sharing contract entered into. Agreement or the agreement means this production sharing agreement executed between sonangol and contractor group, including its annexes. 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. The fundamental distinction between psc and rt regimes lies in the. How to scrutinise a production sharing agreement pubs. A production sharing agreement removes these limitations and allows the oil and gas company to horizontally drill across unit lines in an attempt to obtain production. Digital producer client project client purchase order no.
Economic research serviceusda farmers use of marketing and production contractsaer747 1 introduction contracts are an integral part of the production and marketing of selected livestock commodities, such as broilers, turkeys, eggs, and milk. The first production sharing contract was signed by iiapco in august 1966, with permina the national oil company of indonesia. Oil and gas in indonesia investment and taxation guide 1 foreword welcome to the 7th edition of the pwc indonesia oil and gas in indonesia investment and taxation guide. Revenuesharing arrangements in production sharing agreements illustrate this point vividly. Production sharing agreements psas 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. A detailed examination of the issues the sharing of production cost oil and the recovery of petroleum costs profit oil and the sharing of petroleum. 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. 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.
The investors administer the business at their own expense and risk sharing with the government part of the production output in accordance with the 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. Production sharing agreement on onshore gas fie tranches of daily production million standard cubic feet per day mmscfd rates in contract area for onshore and shelf areas tpdc share of profit gas contractor share of profit gas. This production sharing agreement the agreement is made on the.
Implementing production sharing contracts natural resources. 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. Calculation formulas are delivered with psa for all standard calculation categories required for production sharing contracts. Renegotiation of nigerias production sharing contracts. Before issuance of an agreement, the following must be received by university lands.