The main advantage of this type of oil and gas agreement or tax regime is that it is simple. Unlike public service announcements and risky service contracts, negotiation is less complex. Simply put, a state or mining rights holder benefits from a concession because of the simplicity of the agreement. This configuration was first introduced in Argentina in the 1950s. Later, two subgroups of service contracts emerged: pure service contracts and risky service contracts. Pure service contracts include a fixed contract price as the sole source of revenue for the contracted company. A state essentially hires a company to provide oil or gas exploration, production and production capabilities. In the meantime, risky service contracts imply that the contracted company receives a share of oil or gas revenues, provided that it is solely responsible for covering the costs of oil or gas exploration. A notable disadvantage of PPE affecting a state or mining rights holder is the complexity involved. This type of oil and gas agreement is structurally very complex and requires a high level of negotiation. A lessor must have access to financial and commercial, legal, environmental and technical expertise. Oil and gas are important limited natural resources that require strong collaboration between rights holders and proponents for efficient exploration, production, production and processing.
Note that these activities are subject to significant government regulations. In addition, determining the scope and limits of this cooperation is a key upstream activity within the oil and gas industry. Regional Masterclass Production Sharing Contracts 2019 is a 3-day training course that takes place from 21 to 23 October 2019 (Kuala Lumpur). This course is specifically designed to give the delegate a clear overview of some of the central issues and mechanisms that define a PSC. The course is an immersive experience with case studies and exercises. Delivery is made by open; fluid dialogue – classroom discussion and knowledge exchange. The instructor has over 30 years of experience in the oil and gas industry with over 17 years of teaching experience, including a number of universities in a variety of subjects. He is a consulting specialist in the field of creating high-performance teams. However, the PSCs have their drawbacks, such as the complexity of creating these agreements. There are many key factors that need to be agreed before signing.
Since only a small number of exploration efforts result in commercial discovery, work commitment and financial commitments are crucial negotiating factors as they define the extent of exploration risk. The host country will want to formulate them with the greatest possible specificity, while IOCs prefer commitments that allow maximum discretion. A concession contract is theoretically based on the American concept of land ownership, in which surface and underground resources belong to the recognized landowner. In a specific concession contract, the landowner grants another company or corporation the exclusive rights to explore and own the resources and reserves. This company is responsible for providing the capital and capacity necessary for the exploration, extraction or production and processing of oil or gas deposits. Through CCCs, the host country is able to build up new reserves without risk and without limited costs. The host country is not required to invest significantly in exploration and production activities. After all, the IOC bears all operational and financial costs and risks. The main advantage of this type of oil and gas agreement or tax system is that it is simple.
Negotiations are less complex, unlike AEDs and risky service contracts. Simply put, a concession is granted to an owner of state or mining rights because of the simplicity of the agreement. A production sharing agreement (PPE), also known as a production sharing agreement or CSP, is another type of oil and gas agreement, specifically a type of contractual system first introduced by Indonesia in 1966. A concession contract is theoretically based on the American concept of land ownership, in which surface and underground resources belong to the recognized landowner. In a particular concession contract, the landowner grants another company or corporation exclusive rights to explore and hold resources and reserves. This company is responsible for providing the capital and skills necessary for the exploration, extraction or production and processing of oil or gas deposits. By definition, a PSC is a contract between one or more investors and the host country that establishes the rights to explore, explore and exploit mineral resources in a given area over a given period of time. Like a concession, one of the main advantages of a production sharing agreement is that the lessor does not have to make significant investments. This also means that PPE can be relatively detrimental to a tenant. After all, in this type of oil and gas agreement, the tenant bears all the operational and financial risks. However, the COPS have the drawbacks, such as the complexity of the letter of these agreements.
There are many key factors that need to be agreed before signing. Since a small number of exploration efforts result in a commercial discovery, commitment to work and financial commitments are important negotiating factors as they define the extent of exploration risk. The host country will want to shape them with as much specificity as possible, while the IOC prefers commitments that allow for maximum discretion. Regional Masterclass Production Sharing Contracts 2019 is a three-day training course that runs from 21 to 23 October 2019 (Kuala Lumpur). .
