What Is Epsa Agreement

In order to invoke force majeure under Libyan law in accordance with Article 360 of the Libyan Civil Code and the judgments of the Libyan Supreme Court, three conditions must be met: (i) the event must be beyond the control of the parties, (ii) the event must be unforeseeable at the time of the conclusion of the contract, and (iii) the performance of the obligation must be absolutely impossible to perform. In addition, Article 22.1 (Apology of Obligations) of the EPSA Agreement releases part of its obligations if its non-performance is due to “unforeseen circumstances and actions beyond its control that make it impossible to perform its obligations”. The doctrine of unforeseen events or circumstances requires that an event (i) be exceptional and unforeseeable, (ii) be of a general nature and (iii) occur during the performance of the obligation under the Contract. Production-sharing agreements were first used in Bolivia in the early 1950s, although their first implementation was similar to that of Indonesia today in the 1960s. [1] Today, they are widely used in the Middle East and Central Asia. EOG Resources has entered into an agreement to acquire Tethys Oil`s subsidiary, Tethys Oil Monstasar, as part of an agreement in which EOG will receive a 50% stake from Tethys in Block 49 onshore Oman. The first type of oil and gas exploration/production contract used in Libya was a concession contract. Under a concession agreement, the IOCs were granted the right to explore, produce and market minerals located on one of the various properties or properties in the country. Normally, Libyan territory would be divided into concessions for oil production.

However, the whole country was sometimes considered a concession area for oil production. A concession contract gave the IOC full control, including technical and commercial control, over all aspects of oil and gas production. Performance-based agreements such as Berantai`s SRC focus more on production and production rates than on production-sharing contracts preferred by oil companies. This focus on optimizing production capacity in peripheral areas can be extended to contracts governing the recovery of major oil fields in an industry whose resources are rapidly depleting. Currently, Petronas` recovery factor is about 26% for major oil fields, which can be further improved through optimized production techniques and knowledge sharing. [3] Production Sharing Agreements (PSAs) or Production Sharing Agreements (PSAs) are a common type of contract signed between a government and a resource extraction company (or group of companies) on the amount of the resource (usually oil) extracted from the country. Production-sharing agreements can be beneficial for governments of countries that do not have the expertise and/or capital to develop their resources and wish to attract foreign companies to do so. They can be very profitable deals for the oil companies involved, but are often associated with significant risks. Not only is Libya known to be one of the most difficult countries to legislate in the Middle East, but it is also known for its rigorous negotiating tactics. In 1970, Libya was able to increase its share of profits (royalties) in its agreements with the IOCs to 55% after pressuring the IOCs to reduce their share.

In an effort to increase its share of the IOC`s oil royalties, and with the threat of nationalization of oil companies, Libya was able to move from the traditional concession contract to a new contractual relationship based on profit-sharing. Training and preparing Libyans for certain positions in any operational sector could be seen as a burden by the IOCs. IOCs could argue that the implementation of a training programme under Article 5.7.2 of EPSA IV or any other treaty goes beyond its investment objectives in Libya. In the meantime, such a training programme should not be seen as a point of disagreement and complaints by the IOCs, and the NOC should reconsider it. As a proposal to bring the two sides together and agree on the Libyanisation programme, the NOC should invest in providing a solid foundation for dedicated Libyan technicians and engineers before enforcing EPSA conditions related to the employment of Libyan citizens. In production-sharing agreements, the country`s government assigns the execution of exploration and production activities to an oil company. The oil company bears the mineral and financial risk of the initiative and explores, develops and produces the field as needed. If successful, the company can use the money from the extracted oil to recoup capital and operating expenses, known as the “cost of oil.” The remaining money is known as “profit oil” and is divided between government and corporation. In most production-sharing agreements, changes in international oil prices or the rate of production affect the company`s share of production. Oman`s Ministry of Oil and Gas has signed two new $65 billion Exploration and Production Sharing Agreements (ESPA) to explore and develop onshore concession blocks 51 and 65.

First introduced in Malaysia, Risk Sharing Contracts (CRS) differ from the Production Sharing Contract (PSC), which was first introduced in 1976 and last revised last year as PSC enhanced oil recovery (EOR), which increases the recovery rate from 26% to 40%. As a performance-based agreement, it is being developed in Malaysia so that the Malaysian people and private partners benefit from both the successful and cost-effective monetization of these peripheral areas. At the Center for Energy Sustainability and Economics` Production Optimization Week Asian Forum on July 27, 2011 in Malaysia, Deputy Minister of Finance YB. Senator Dato` Ir. Donald Lim Siang Chai explained that the revolutionary CSR requires optimal implementation of production targets and enables the transfer of knowledge from joint ventures between foreign and local players in the development of Malaysia`s 106 marginal fields, which contain a total of 580 million barrels of oil equivalent (BOE) in the current energy-efficient energy market with high demand and low resources. [2] EPSA IV was introduced in 2005 at a time when oil prices were high, making investments in libya`s oil industry attractive. Thanks to EPSA IV, the NOC has taken power by replacing the local Libyan partners of the IOCs. As a result, the NOC has become a decision-maker in all critical aspects of production under the new agreement. BP and Eni have signed an agreement with Oman`s Ministry of Oil and Gas for more exploration opportunities in the country. After the reorganization of participation in oil production, introduced in 1972, Libya became the holder of 51% of the shares in concession contracts.

Companies that refused to comply with the new rules, such as British Petroleum, were nationalised. Between 1974 and 1979, the Exploration and Production Sharing Agreement (EPSA 1) was introduced. Libya has continued to release new versions of EPSA in hopes of attracting more investors to the oil industry. EPSA II was introduced in 1979, followed by EPSA III in 1988. Wintershall Dea (formerly Wintershall and DEA) has been involved in crude oil exploration and production in Libya since 1958. The subsidiary Wintershall Aktiengesellschaft, a joint venture between Wintershall Dea and Gazprom E&P International, has been operating nine oil fields in two concessions in the Sirte Basin since 1966, about 1,000 kilometres southeast of the capital Tripoli, in the municipality of Al-Wahat. Since 2008, Gazprom E&P International has held a 49% stake in these activities. The most important reservoir is the As-Sarah field near the oasis settlement of Jakhira. EPSA V should avoid this impasse and propose a viable solution. Blockages can be resolved by referring the disputed issue to an expert whose opinion could be submitted by an international consulting firm mandated by the parties to resolve the issue in question. Overall, it is advisable to have a detailed and quick decision-making mechanism to resolve problems that arise. San Donato Milanese (Milan), July 31 – Following an agreement signed on January 14, 2019, Eni and BP today signed a Gas Exploration and Production Sharing Agreement (EPSA) with the Government of the Sultanate of Oman for Unit 77.

EPSA members provide reliable and competitive electricity from environmentally friendly facilities with a diverse mix of fuels and technologies. In the mid-1970s, the NOC set up a programme to increase the recruitment of Libyan nationals into the oil and gas industry. The program was dubbed “Libyanization” and required THE IOCs to train Libyans and identify jobs that could be filled by Libyan citizens. The IOC did not wholeheartedly welcome Libyanization for many reasons. A court decision on the termination of a contract under Article 360 of the Libyan Civil Code, which states: “An obligation expires when the debtor determines that its performance has become impossible for reasons beyond his control.” If, after payment of all Tail claims and fees and expenses for the administration of the Tail Fund funds remain in the Tail Fund, such remaining funds will be reimbursed to (i) the Chamber staff officers and the attending physician who contributed to the Tail Fund, and (ii) SVCMC (or as provided for in the Plan) in a proportion equal to the amount of each party`s monetary contribution. . . .