What is production sharing contract in Nigeria?
What is production sharing contract in Nigeria?
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.
What is PSC in oil and gas?
A PSC (Production Sharing Contract), or PSA (Production Sharing Agreement) was first introduced in Indonesia in 1960 for the agriculture sector before it was adopted for the petroleum industry. Prior to the introduction of PSC contracts in Malaysia, the government passed the Petroleum Development Act of 1974 (PDA).
How does a production sharing agreement work?
A production sharing contract (PSC) is a contractual relationship between a host government and a private sector participant (‘investor’) whereby the government contracts with the investor to carry out oil and gas exploration and production activities (E&P activities) in a defined area for a defined period of time.
What is EPSA agreement?
The second one is the exploration and production sharing agreement (EPSA). Unlike the tax and royalty agreements; the host government retains all the hydrocarbons in place. In this type of agreement, the contractor shall bear all exploration costs and shall also bear all associated risks.
What is the difference between JV and PSC?
In JVs agreement, oil and gas operations funds are contributed by JV partners in proportion to their participating interests. While under PSCs, FOCs bear all the risks and costs of exploration and production. Though government participates on commercial discovery.
What is production sharing in international business?
Global production sharing—the breakup of a production process into vertically separated stages that are carried out in different countries—has become one of the defining characteristics of world trade over the past few decades.
What is cost oil in PSC?
When successful, the company is permitted to use the money from produced oil to recover capital and operational expenditures, known as “cost oil”. The remaining money is known as “profit oil”, and is split between the government and the company, typically at a rate of about 80% for the government, 20% for the company.
What is JOA NNPC?
Joint Operating Agreement The Joint Operating Agreements (JOA) is the basic, standard agreement between the NNPC and the operators. It sets the guidelines/modalities for running the operations.
What is PSC in NNPC?
The Nigerian National Petroleum Corporation (NNPC) and Bonga Production Sharing Contract (PSC) partners, have signed watershed agreements to unlock $700m (about N320bn) revenue to the federation. The field also supplies gas to NLNG another strategically important asset to NNPC and its partners.
What is production sharing plan?
PRODUCTION SHARING PLAN — Any enterprise adopting the scheme provided for in Section 32 hereof or operating under a production venture, lease, management contract or other similar arrangement and any farm covered by Sections 8 and 11 hereof is hereby mandated to execute within ninety (90) days from the effectivity of …
What is modified carry agreement?
Modified Carry Agreement is a financing agreement whereby the International Oil Companies (IOC’s) will advance loan to NNPC for the purpose of investing in upstream projects. The three oil giants are operating in Nigeria under a joint venture arrangement with NNPC, in the NNPC/SPDC/TOTAL/NAOC joint venture.
Who is Bala Wunti?
Mr Wunti is the Chief Strategist and Commercial Superintendent of the Nigerian National Petroleum Corporation (NNPC) where he is charged with controlling overall business planning and budget administration.
