Reliance industries limited ril, today signed a production sharing contract for the offshore contract area k in dili, capital of timor leste. 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. Maniruzzaman, university of portsmouth oil discovery and technical change in southeast asia legal aspects of production sharing contracts in the indonesian petroleum industry r. 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.
Model production sharing contract under the petroleum act. This film financing agreement the agreement is entered into as of february 7, 2007 by and among dod, llc, a california limited liability company the llc, public media works, inc. May 20, 2014 abstract governments choose among many contracts to delegate the exploration and the extraction of oil. Through pscs, our partner bear exploration, development and production costs in return for an agreed share of production. Production sharing contracts production sharing contracts advanced master class dr pedro van meurs is a really excellent instructor having detailed knowledge about the. The process for signing the contract greatly influences the extent to which peoples voices can be heard. 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.
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. Joint venture agreement jva and production sharing contract psc. This agreement, made and entered into in baku, the azerbaijan republic, this 4 day of june, 1996. Exploration opportunities production sharing contract overview. Production sharing agreements psas are among the most common types of contractual arrangements for petroleum exploration and development. Reliance natural resources ltd vs reliance industries ltd. Public notice and production sharing contract 06105 replaced interim psc jpda 0301, july 2006. Production sharing contract production sharing agreement. Agreement or the agreement means this production sharing agreement executed among the government, tpdc and abc, including its annexes. The governments new help policy allows access to all forms of hydrocarbons, marketing and pricing freedom for gas and moving towards an open acreage licensing system.
The parties may place reliance on the actions of socar taken on. Production sharing contract will be brought into discussion. Contract extension proposed to the minister through bpmigas within 10 to 2 years prior to the original contract expiry date. Eogil and ril have represented that they have, or will acquire and make. 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. Understanding stabilization techniques in production sharing agreements. In january 2006, the government of timor leste had invited bids for 11 offshore exploration blocks in shallow to ultra deep waters in their country. Therefore, scrutinising contracts is an important mechanism for. Although its purpose is to finalize the sale, it is not the business end of the contract. Scope 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 contractor s sole risk and expense. Production sharing contract royalty payment petroleum. Reliance natural resources ltd vs reliance industries ltd on 7 may, 2010. 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.
Two major fiscal regimes are adopted for exploiting petroleum resources. Production sharing of petroleum between contractor and government. Anshika ahuja megha gurnani sharmistha ghosh sunanda bishnoi introduction. The principal objective of psc audit is to provide assurance to the minister that contractors are in compliance with the production sharing contracts. Agreement or the agreement means this production sharing agreement executed between sonangol and contractor group, including its annexes. Psc is the acronym of production sharing contract psa may also be used to refer to production sharing agreement. A variety of psc terms are designed to encourage an optimal level of investment based on the complexity of petroleum resources. Productionsharing contract extension for barmer likely. Production sharing contract overview production sharing contracts. Production sharing agreements versus concession contracts. Production sharing agreements versus concession contracts julie ing.
Delhi high court asks reliance industries, british gas to disclose assets on centre plea 21 dec, 2019, 01. Model psc under the petroleum act page 2 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. 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 psas for yemen blocks 34 and 37 were terminated on 5 october 2015. The contractual form changes between and within countries but the most common contracts are concession contracts and production sharing agree. Governmentpsus cannot always put in such investments and sometimes also lack the technology and expertise to tap into the reser.
Each exploration and production sharing agreement epsa is based on a. 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. The reliance industries limited ril was supposed to relinquish 25% of the total area outside the discoveries in 2004 and 2005, as per the production sharing contract psc. 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. The fundamental distinction between psc and rt regimes lies in the. Merger and acquisition costs or participating interest costs. When it involves the period of gas sales agreement which is beyond the efective date of the contract, the extension may be. How to scrutinise a production sharing agreement a guide or the oi and gas sector ased on eerience rom the asian egion 2012. A production sharing contract psc is a contract between either a hc or its state oil. Reliance industries company history business standard. 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, one of the type of joint. Production sharing contracts through pscs, our partner bear exploration, development and production costs in return for an agreed share of production.
Year that saw oil, gas production switch to revenuesharing mode published on december 30. An acquisition agreement is the contract that governs the purchase of one company by another or the merger of two companies. April 2002 presentation by ceo mulva on merger pdf. Oil and gas exploration requires substantial investment and the chances of not hitting the reserves are always there. 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. However, the entire block was declared as a discovery area and ril was allowed to retain it. Fabrikant russias production sharing contract regime s. A comparative analysis of production sharing contracts of. Effective date means the first day of the month next following the month in which this agreement. Renegotiation of nigerias production sharing contracts.
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. 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. This production sharing contract the contract is entered into in beijing on. Production sharing contracts by direct award, without a public tender.
The chinese company bgp started offshore seismic research the next day and handed the results over to timorgap and anp on 10 march 2016. Production sharing agreements psas or production sharing contracts pscs are a common type of contract signed between a government and a resource. The company has withdrawn from license contract and joint operating agreement for exploration and exploitation of. 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. Contract means this production sharing contract, including its recitals and schedules. 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. Request pdf oil and gas service contracts around the world.
However, considering the inherent difficulties associated with joint venture agreements, developing countries gave emphasis to production sharing contract. 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. It does not only consists of what the seller promises to sell and what the buyer promises to pay, it also specifies the manner. Read more about production sharing contract extension for barmer likely. Productionsharing agreements psas are among the most common types of contractual arrangements for petroleum exploration and development. The introduction of the gross split scheme in 2017, followed by the issuance of regulations including tax and accounting guidance over the past two years, has been. What is the difference between a production sharing. 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. Oil and gas in indonesia investment and taxation guide 2018 pwc. Kalarbawanoor contract means the production sharing contract dated 28.
471 234 1220 579 925 1638 579 741 394 764 261 1396 486 1076 1181 62 817 1297 1587 149 1056 1205 1331 191 364 97 543 1032 146 436 1063 525 252