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Posted by on Sep 20, 2021 in Uncategorized | 0 comments

Final Production Sharing Agreement

Production sharing agreements were first used in Bolivia in the early 1950s, although their first implementation similar to today`s in Indonesia took place in the 1960s. [1] Today, they are often used in the Middle East and Central Asia. The objective of the Sakhalin-2 PSA was to define the conditions for the exploration, exploitation, production, processing and transport of hydrocarbons by replacing the existing tax and licensing regimes with a contractual agreement that remained effective for the total duration of the project. According to Sakhalin-2 PSA, the Russian Federation retains the sovereign right of ownership of oil and gas fields and Sakhalin Energy invests the necessary funds for exploration and exploitation. In 1997, corporate partners and the former state oil and gas agency began exploiting Karachaganak`s huge reserves. They signed a final sharing production agreement (FPSA) with which the Karachaganak partnership will operate until 2038. Since the signing of this agreement, they have invested more than $22 billion in development and have used advanced hydrocarbon technology in one of the world`s most complex reservoirs. The sakhalin-2 PSA provides for a specific tax system for the development of projects. Most taxes and customs duties are replaced by the division of production. The production division for the Sakhalin-2 project started in 2012. PPE and licensing are the most common types of agreements used in the global oil and gas industry. Indonesia was the first country to start using production-sharing agreements as a common instrument to allow foreign companies to exploit local oil fields.

The first PSA was signed in 1960. Today, PPE is used in more than 60 countries. Sachalin Energy signed PSA in 1994 and in 1999 began extracting oil from the Molikpaq platform Performance-based deals like berantai RSC have placed more emphasis on production and recovery rates compared to production-sharing contracts that are favored by oil companies. The focus on optimizing production capacity in peripheral areas can be extended to contracts that govern the recovery of major oil fields in an industry with rapidly depleted resources. At present, Petronas` recovery factor is about 26% for major oil fields, which can be further improved through optimized production techniques and knowledge exchange. [3] Production Sharing Agreements (PSAs) or Production Sharing Agreements (PSCs) are a common type of contract signed between a government and a commodity extraction company (or group of companies) that defines the amount of the resource (usually oil) that is extracted from the country. .