CBM Production and Allocation. 13.1 The Operator shall, in accordance with the production profile, adjusted as the case may be, set forth in the approved Overall Development Program for each CBM Field, work out a CBM production plan for each CBM Field in each Calendar Year and carry out CBM production pursuant to such plan. 13.2 The Annual Gross Production of CBM and Liquid Hydrocarbons of each CBM Field within the Contract Area in each Calendar Year during the production period shall be allocated in accordance with the following sequence and proportions: 13.2.1 The percentages of the Annual Gross Production of CBM and Liquid Hydrocarbons specified in paragraphs (a) and (b) hereunder shall be used for payments of the Value Added Tax and of Royalty respectively and shall be paid in kind to the relevant authorities of the Chinese Government through CUCBM. (a) Value Added Tax shall be paid in accordance with relevant regulations of the People’s Republic of China; and (b) Royalty shall be paid in accordance with relevant regulations of the People's Republic of China. 13.2.2 Seventy percent (70%) of the Annual Gross Production of CBM and Liquid Hydrocarbons shall be deemed as the "cost recovery CBM and Liquid Hydrocarbons" and shall be used for payments or for cost recovery in the following sequence: 13.2.2.1 Payment in kind for the operating costs actually incurred but not yet recovered by the Parties pursuant to Article 12.2.1 hereof based on the price of the said "cost recovery CBM and Liquid Hydrocarbons" determined in accordance with Article 14 hereof. 13.2.2.2 The remainder of the "cost recovery CBM and Liquid Hydrocarbons" shall, after payment for operating costs in accordance with Article 13.2.2.1 herein, be deemed as "investment recovery CBM and Liquid Hydrocarbons". Such "investment recovery CBM and Liquid Hydrocarbons" shall be used for the recovery of the exploration costs in respect of the Contract Area which were incurred and not yet recovered by the Contractor, and shall be used for the recovery of the development costs in respect of the CBM Field itself which were incurred and not yet recovered by CUCBM and the Contractor in accordance with Articles 12.2.2 and 12.2.3 hereof, and Deemed Interest thereon. The method of recovery and the recovery sequence are as follows: (a) Beginning in the Calendar Year during which the production of any CBM Field within the Contract Area commences, the "investment recovery CBM and Liquid Hydrocarbons" referred to in Article 13.2.2.2 herein, based on the price which has been determined in accordance with Article 14 hereof, shall be paid in kind first to the companies comprising the Contractor for the recovery of the exploration costs which were incurred in respect of, and have not yet been recovered from, the Contract Area. The unrecovered exploration costs shall be carried forward to and recovered from the “investment recovery CBM and Liquid Hydrocarbons” in succeeding Calendar Years until fully recovered by the Contractor. (b) Beginning in the Calendar Year during which the exploration costs incurred by the Contractor in respect of the Contract Area have been fully recovered, the remainder of the "investment recovery CBM and Liquid Hydrocarbons" of a CBM Field shall be used for the simultaneous recovery of the development costs incurred and not yet recovered respectively by CUCBM and the Contractor and Deemed Interest thereon in respect of such CBM Field in proportion to their respective participating interests therein based on the price of such remainder of the "investment recovery CBM and Liquid Hydrocarbons" determined in accordance with Article 14 hereof. The unrecovered development costs and Deemed Interest thereon shall be carried forward to and recovered from the "investment recovery CBM and Liquid Hydrocarbons" in succeeding Calendar Years until fully recovered. (c) During the production period of a CBM Field, costs for an additional development project incurred pursuant to Article 11.9 hereof and Deemed Interest thereon shall be recovered together with the unrecovered development costs and Deemed Interest thereon. If the development costs and Deemed Interest thereon have been fully recovered, then costs for the said additional development project and Deemed Interest thereon shall be recovered from the "investment recovery CBM and Liquid Hydrocarbons" of such CBM Field referred to in Article 13.2.2.2 herein in accordance with the provisions specified in Article 13.2 herein. The unrecovered costs for the additional development project and Deemed Interest thereon shall be carried forward to and recovered in succeeding Calendar Years until fully recovered. (d) After the recovery of a CBM Field's development costs and Deemed Interest thereon and/or costs for the additional development project and Deemed Interest thereon from the said CBM Field by the Parties, the remainder of the "investment recovery CBM and Liquid Hydrocarbons" shall automatically be regarded as part of the "remainder CBM and Liquid Hydrocarbons" referred to in Article 13.2.3 herein. By the date of expiration of the production period of a CBM Field pursuant to Article 4.5 hereof, if any development costs and Deemed Interest thereon and/or costs for the additional development project incurred in respect of such CBM Field and Deemed Interest thereon have not yet been fully recovered, then such unrecovered costs and Deemed Interest thereon shall be regarded as a loss, and the Parties shall bear the loss in proportion to their respective participating interests. 13.2.3 The remainder of the Annual Gross Production of CBM and Liquid Hydrocarbons after the allocation referred to in Articles 13.2.1 and 13.2.2 herein shall be deemed as "remainder CBM and Liquid Hydrocarbons". Such "remainder CBM and Liquid Hydrocarbons" shall be divided into "share CBM and Liquid Hydrocarbons" of the Chinese side and "allocable remainder CBM and Liquid Hydrocarbons". The "allocable remainder CBM and Liquid Hydrocarbons" of each CBM Field in each Calendar Year shall be equal to the "remainder CBM and Liquid Hydrocarbons" of that Calendar Year multiplied by the factor (X) for each CBM Field within the Contract Area in that Calendar Year. The factor (X) of each CBM Field in each Calendar Year shall be determined in accordance with the following successive incremental tiers on the basis of the Annual Gross Production of CBM and Liquid Hydrocarbons from such CBM Field during that Calendar Year. ________________________________________________________________ Annual Gross Production Factors (X) in Percentage of Applicable to Each CBM and Liquid Hydrocarbons Production Tier of From Each CBM Field Each CBM Field Within (Million Cubic Meters) the Contract Area ________________________________________________________________ equal to or less than 500 Xl = 100 percent（100%） over 500 to 800 X2 = 99 percent（99%） over 800 to 1,200 X3 = 98 percent（98%） over 1,200 to 1,800 X4 = 96 percent（96%） over 1,800 to 2,500 X5 = 93 percent（93%） over 2,500 to 5,000 X6 = 89 percent（89%） over 5,000 X7 = 85 percent（85%） ________________________________________________________________ In the above table, it is assumed that each cubic meter of CBM has a heating value of thirty-six thousand and nine hundred sixty (36,960) BTU approximately. On this basis, a metric ton of Liquid Hydrocarbons in general will have a heating value of forty- three (43) million BTU, or equivalent to 1,164 cubic meters of CBM. 1.0 kilocalorie is equal to 3.97 BTU. Adjustments will be made if actual heating value exceeds or is less than the above by ten percent (10%) or more. An example of application in calculating the factor (X): Assuming that there are two producing commercial CBM Fields A and B within the Contract Area and the Annual Gross Production of CBM and Liquid Hydrocarbons from CBM Field A in a Calendar Year is three thousand and sixty four (3,064) million cubic meters, and that from CBM Field B is four thousand five hundred and ninety (4,590) million cubic meters, the factor (X) of CBM Field A in that Calendar Year shall be: 500X1 + 300X2 +400X3 + 600X4 + 700x5 + 564X6 X = -------------------------------------------------------------------------X 100% 3,064 and the factor (X) of CBM Field B in that Calendar Year shall be: 500X1 + 300X2 + 400X3 + 600X4 + 700X5 + 2090X6 X = -------------------------------------------------------------------------X 100% 4,590 13.2.4 The "allocable remainder CBM and Liquid Hydrocarbons" of each CBM Field in each Calendar Year referred to in Article 13.2.3 herein shall be shared by the Parties in proportion to their respective participating interests in the development costs, forty percent (40%) for CUCBM and sixty percent (60%) for the Contractor. In the event that CUCBM does not participate in the development of an CBM Field within the Contract Area, the Contractor shall obtain one hundred percent (100%) of the "allocable remainder CBM and Liquid Hydrocarbons" of that CBM Field. In the event that CUCBM participates to an extent less than forty percent (40%) in the development of an CBM Field within the Contract Area, the "allocable remainder CBM and Liquid Hydrocarbons" of such CBM Field in that Calendar Year shall be shared by the Parties in proportion to their actual respective participating interests in such CBM Field. 13.3 Pursuant to the method of allocation specified in this Article, the Contractor may obtain an aggregate amount of CBM and Liquid Hydrocarbons consisting of the following three categories and shall be subject to Article 1.7 of Annex II. 13.3.1 The total amount of CBM and Liquid Hydrocarbons as converted from the actual operating costs paid by the Contractor in all CBM Fields in proportion to its participating interests in the development costs stipulated in Article 13.2.2.1 hereof when recovering such costs; 13.3.2 The total amount of the "investment recovery CBM and Liquid Hydrocarbons" from all CBM Fields due to the Contractor provided for in Article 13.2.2.2 herein; and 13.3.3 The total amount of the "allocable remainder CBM and Liquid Hydrocarbons" of all CBM Fields due to the Contractor in accordance with Article 13.2.4 herein.
Appears in 1 contract
Samples: Production Sharing Contract (Pacific Asia China Energy Inc.)
CBM Production and Allocation. 13.1 The Operator shall, in accordance with the production profile, adjusted as the case may be, set forth in the approved Overall Development Program for each CBM Field, work out a CBM production and joint marketing plan for each CBM Field in each Calendar Year and carry out CBM production pursuant to such plan. Such plan shall have the Operator receiving all proceeds from sales and making payments and accounting for cost recovery as detailed below.
13.2 The Annual Gross Production of CBM and Liquid Hydrocarbons of each CBM Field within the Contract Area in each Calendar Year during the production period shall be allocated allocated in accordance with the following sequence and proportions:
13.2.1 The percentages of the Annual Gross Production of CBM and Liquid Hydrocarbons specified in paragraphs (a) and (b) hereunder shall be used for payments of the Value Added Tax and of Royalty respectively and shall be paid in kind to the relevant authorities authorities of the Chinese Government through CUCBM.
(a) Value Added Tax Five percent (5%) of the Annual Gross Production of CBM and Liquid Hydrocarbons shall be paid in accordance with relevant regulations kind to the competent authorities for payment of the People’s Republic of China; and
(b) Royalty shall be paid Value Added Tax in accordance with relevant rules and regulations of the People's Republic of ChinaChina through CUCBM; and
(b) Payment of Royalty shall be made pursuant to the relevant rules and regulations of the People's Republic of China through CUCBM.
13.2.2 Seventy Seventy-five percent (7075%) of the Annual Gross Production of CBM and Liquid Hydrocarbons shall be deemed as the "cost recovery CBM and Liquid Hydrocarbons" and shall be used for payments or for cost recovery in the following sequence:
13.2.2.1 Payment in kind for the operating costs actually incurred but not yet recovered recovered by the Parties pursuant to Article 12.2.1 hereof based on the price of the said "cost recovery CBM and Liquid Hydrocarbons" determined in accordance with Article 14 hereof.
13.2.2.2 The remainder of the "cost recovery CBM and Liquid Hydrocarbons" shall, after payment for operating costs in accordance with Article 13.2.2.1 13.
2.2.1 herein, be deemed as "investment recovery recovery CBM and Liquid Hydrocarbons". Such "investment recovery CBM and Liquid Hydrocarbons" shall be used for the recovery recovery of the exploration exploration costs incurred and not yet recovered by Contractor in respect of the Contract Area which were and for the recovery of Pre-Contract Costs incurred and not yet recovered by CUCBM in respect of the Contractor, Contract Area.. The "investment recovery CBM and Liquid Hydrocarbons" shall also be used for the recovery of the development costs in respect of the CBM Field itself which were have been incurred and but not yet recovered by CUCBM and the Contractor in accordance with Articles 12.2.2 and 12.2.3 hereof, and Deemed Interest Interest thereon. The method of recovery and the recovery sequence are as follows:
(a) Beginning in the Calendar Year during which the production of any CBM Field within the Contract Area commences, the "investment recovery recovery CBM and Liquid Hydrocarbons" referred to in Article 13.2.2.2 herein, based on the price which has been determined in accordance with Article 14 hereof, shall be paid in kind first simultaneously on a 50% - 50% basis to the companies comprising the Contractor for the recovery recovery of the exploration costs which were have been incurred in respect of, but have not yet been recovered from, the Contract Area and to CUCBM for the recovery of Pre-Contract Costs which have been incurred in respect of, but have not yet been recovered from, the Contract Area. If CUCBM recovers its Pre-Contract Costs prior to Contractor's recovery of its exploration costs, that portion of the "investment recovery CBM and Liquid Hydrocarbons" previously paid to CUCBM shall then be paid to Contractor for the cost recovery of Contractor's unrecovered exploration costs.
(a) from all CBM Fields in the Contract Area during the recovery of exploration costs shall be One Million Two Hundred Forty Thousand U.S. dollars (US$1,240,000.00). The unrecovered exploration costs and the unrecovered Pre-Contract Costs shall be carried forward to and recovered from the “"investment recovery CBM and Liquid Hydrocarbons” " in succeeding Calendar Years until fully recovered by the Contractor.
(b) Beginning in the Calendar Year during which the exploration costs incurred by the Contractor and the Pre-Contract Costs incurred by CUCBM in respect of the Contract Area have been fully recovered, the remainder of the "investment recovery CBM and Liquid Hydrocarbons" of a CBM Field shall be used for the simultaneous recovery of the development costs incurred and not yet recovered respectively by CUCBM and the Contractor Contractor and Deemed Interest thereon in respect of such CBM Field in proportion proportion to their respective participating interests therein based on the price of such remainder of the "investment recovery CBM and Liquid Hydrocarbons" determined in accordance with Article 14 hereof. The unrecovered development costs and Deemed Interest thereon shall be carried forward to and recovered from the "investment investment recovery CBM and Liquid Hydrocarbons" in succeeding Calendar Years until fully recovered.
(c) During the production period of a CBM Field, costs for an additional development development project incurred pursuant to Article 11.9 hereof and Deemed Interest thereon thereon shall be recovered together with the unrecovered unrecovered development costs and Deemed Interest thereon. If the development costs and Deemed Interest thereon have been fully recovered, then costs for the said additional development project and Deemed Interest thereon shall be recovered from the "investment recovery CBM and Liquid Hydrocarbons" of such CBM Field referred to in Article 13.2.2.2 herein in accordance with the provisions specified in Article 13.2 herein. The unrecovered costs for the additional development project and Deemed Interest thereon shall be carried forward to and recovered in succeeding Calendar Years until fully recovered13.
(d) After the recovery of a CBM Field's development costs and Deemed Interest thereon and/or costs for the additional development project and Deemed Interest thereon from the said CBM Field by the Parties, the remainder of the "investment recovery CBM and Liquid Hydrocarbons" shall automatically be regarded as part of the "remainder CBM and Liquid Hydrocarbons" referred to in Article 13.2.3 herein. By the date of expiration of the production period of a CBM Field pursuant to Article 4.5 hereof, if any development costs and Deemed Interest thereon and/or costs for the additional development project incurred in respect of such CBM Field and Deemed Interest thereon have not yet been fully recovered, then such unrecovered costs and Deemed Interest thereon shall be regarded as a loss, and the Parties shall bear the loss in proportion to their respective participating interests.
13.2.3 The remainder of the Annual Gross Production of CBM and Liquid Hydrocarbons after the allocation referred to in Articles 13.2.1 and 13.2.2 herein shall be deemed as "remainder CBM and Liquid Hydrocarbons". Such "remainder CBM and Liquid Hydrocarbons" shall be divided into "share CBM and Liquid Hydrocarbons" of the Chinese side and "allocable remainder CBM and Liquid Hydrocarbons". The "allocable remainder CBM and Liquid Hydrocarbons" of each CBM Field in each Calendar Year shall be equal to the "remainder CBM and Liquid Hydrocarbons" of that Calendar Year multiplied by the factor (X) for each CBM Field within the Contract Area in that Calendar Year. The factor (X) of each CBM Field in each Calendar Year shall be determined in accordance with the following successive incremental tiers on the basis of the Annual Gross Production of CBM and Liquid Hydrocarbons from such CBM Field during that Calendar Year. ________________________________________________________________ Annual Gross Production Factors (X) in Percentage of Applicable to Each CBM and Liquid Hydrocarbons Production Tier of From Each CBM Field Each CBM Field Within (Million Cubic Meters) the Contract Area ________________________________________________________________ equal to or less than 500 Xl = 100 percent（100%） over 500 to 800 X2 = 99 percent（99%） over 800 to 1,200 X3 = 98 percent（98%） over 1,200 to 1,800 X4 = 96 percent（96%） over 1,800 to 2,500 X5 = 93 percent（93%） over 2,500 to 5,000 X6 = 89 percent（89%） over 5,000 X7 = 85 percent（85%） ________________________________________________________________ In the above table, it is assumed that each cubic meter of CBM has a heating value of thirty-six thousand and nine hundred sixty (36,960) BTU approximately. On this basis, a metric ton of Liquid Hydrocarbons in general will have a heating value of forty- three (43) million BTU, or equivalent to 1,164 cubic meters of CBM. 1.0 kilocalorie is equal to 3.97 BTU. Adjustments will be made if actual heating value exceeds or is less than the above by ten percent (10%) or more. An example of application in calculating the factor (X): Assuming that there are two producing commercial CBM Fields A and B within the Contract Area and the Annual Gross Production of CBM and Liquid Hydrocarbons from CBM Field A in a Calendar Year is three thousand and sixty four (3,064) million cubic meters, and that from CBM Field B is four thousand five hundred and ninety (4,590) million cubic meters, the factor (X) of CBM Field A in that Calendar Year shall be: 500X1 + 300X2 +400X3 + 600X4 + 700x5 + 564X6 X = -------------------------------------------------------------------------X 100% 3,064 and the factor (X) of CBM Field B in that Calendar Year shall be: 500X1 + 300X2 + 400X3 + 600X4 + 700X5 + 2090X6 X = -------------------------------------------------------------------------X 100% 4,590
13.2.4 The "allocable remainder CBM and Liquid Hydrocarbons" of each CBM Field in each Calendar Year referred to in Article 13.2.3 herein shall be shared by the Parties in proportion to their respective participating interests in the development costs, forty percent (40%) for CUCBM and sixty percent (60%) for the Contractor. In the event that CUCBM does not participate in the development of an CBM Field within the Contract Area, the Contractor shall obtain one hundred percent (100%) of the "allocable remainder CBM and Liquid Hydrocarbons" of that CBM Field. In the event that CUCBM participates to an extent less than forty percent (40%) in the development of an CBM Field within the Contract Area, the "allocable remainder CBM and Liquid Hydrocarbons" of such CBM Field in that Calendar Year shall be shared by the Parties in proportion to their actual respective participating interests in such CBM Field.
13.3 Pursuant to the method of allocation specified in this Article, the Contractor may obtain an aggregate amount of CBM and Liquid Hydrocarbons consisting of the following three categories and shall be subject to Article 1.7 of Annex II.
13.3.1 The total amount of CBM and Liquid Hydrocarbons as converted from the actual operating costs paid by the Contractor in all CBM Fields in proportion to its participating interests in the development costs stipulated in Article 13.2.2.1 hereof when recovering such costs;
13.3.2 The total amount of the "investment recovery CBM and Liquid Hydrocarbons" from all CBM Fields due to the Contractor provided for in Article 13.2.2.2 herein; and
13.3.3 The total amount of the "allocable remainder CBM and Liquid Hydrocarbons" of all CBM Fields due to the Contractor in accordance with Article 13.2.4 herein.
Appears in 1 contract
CBM Production and Allocation. 13.1 The Operator shall, in accordance with the production profile, adjusted as the case may be, set forth in the approved Overall Development Program for each CBM Field, work out a CBM production and joint marketing plan for each CBM Field in each Calendar Year and carry out CBM production pursuant to such plan. Such plan shall have the Operator receiving all proceeds from sales and making payments and accounting for cost recovery as detailed below.
13.2 The Annual Gross Production of CBM and Liquid Hydrocarbons of each CBM Field within the Contract Area in each Calendar Year during the production period shall be allocated allocated in accordance with the following sequence and proportions:
13.2.1 The percentages of the Annual Gross Production of CBM and Liquid Hydrocarbons specified in paragraphs (a) and (b) hereunder shall be used for payments of the Value Added Tax and of Royalty respectively and shall be paid in kind to the relevant authorities authorities of the Chinese Government through CUCBM.
(a) Value Added Tax Five percent (5%) of the Annual Gross Production of CBM and Liquid Hydrocarbons shall be paid in accordance with relevant regulations kind to the competent authorities for payment of the People’s Republic of China; and
(b) Royalty shall be paid Value Added Tax in accordance with relevant rules and regulations of the People's Republic of ChinaChina through CUCBM; and
(b) Payment of Royalty shall be made pursuant to the relevant rules and regulations of the People's Republic of China through CUCBM.
13.2.2 Seventy Seventy-five percent (7075%) of the Annual Gross Production of CBM and Liquid Hydrocarbons shall be deemed as the "cost recovery CBM and Liquid Hydrocarbons" and shall be used for payments or for cost recovery in the following sequence:
13.2.2.1 Payment in kind for the operating costs actually incurred but not yet recovered recovered by the Parties pursuant to Article 12.2.1 hereof based on the price of the said "cost recovery CBM and Liquid Hydrocarbons" determined in accordance with Article 14 hereof.
13.2.2.2 The remainder of the "cost recovery CBM and Liquid Hydrocarbons" shall, after payment for operating costs in accordance with Article 13.2.2.1 herein, be deemed as "investment recovery recovery CBM and Liquid Hydrocarbons". Such "investment recovery CBM and Liquid Hydrocarbons" shall be used for the recovery recovery of the exploration exploration costs incurred and not yet recovered by Contractor in respect of the Contract Area which were and for the recovery of Pre-Contract Costs incurred and not yet recovered by CUCBM in respect of the Contractor, Contract Area.. The "investment recovery CBM and Liquid Hydrocarbons" shall also be used for the recovery of the development costs in respect of the CBM Field itself which were have been incurred and but not yet recovered by CUCBM and the Contractor in accordance with Articles 12.2.2 and 12.2.3 hereof, and Deemed Interest Interest thereon. The method of recovery and the recovery sequence are as follows:
(a) Beginning in the Calendar Year during which the production of any CBM Field within the Contract Area commences, the "investment recovery recovery CBM and Liquid Hydrocarbons" referred to in Article 13.2.2.2 herein, based on the price which has been determined in accordance with Article 14 hereof, shall be paid in kind first simultaneously on a 50% - 50% basis to the companies comprising the Contractor for the recovery recovery of the exploration costs which were have been incurred <PAGE> in respect of, but have not yet been recovered from, the Contract Area and to CUCBM for the recovery of Pre-Contract Costs which have been incurred in respect of, and but have not yet been recovered from, the Contract Area. If CUCBM recovers its Pre-Contract Costs prior to Contractor's recovery of its exploration costs, that portion of the "investment recovery CBM and Liquid Hydrocarbons" previously paid to CUCBM shall then be paid to Contractor for the cost recovery of Contractor's unrecovered exploration costs.
(a) from all CBM Fields in the Contract Area during the recovery of exploration costs shall be Two Million Eight Hundred Forty Thousand U.S. dollars (US$2,840,000). The unrecovered exploration costs and the unrecovered Pre-Contract Costs shall be carried forward to and recovered from the “"investment recovery CBM and Liquid Hydrocarbons” " in succeeding Calendar Years until fully recovered by the Contractor.
(b) Beginning in the Calendar Year during which the exploration costs incurred by the Contractor and the Pre-Contract Costs incurred by CUCBM in respect of the Contract Area have been fully recovered, the remainder of the "investment recovery CBM and Liquid Hydrocarbons" of a CBM Field shall be used for the simultaneous recovery of the development costs incurred and not yet recovered respectively by CUCBM and the Contractor Contractor and Deemed Interest thereon in respect of such CBM Field in proportion proportion to their respective participating interests therein based on the price of such remainder of the "investment recovery CBM and Liquid Hydrocarbons" determined in accordance with Article 14 hereof. The unrecovered development costs and Deemed Interest thereon shall be carried forward to and recovered from the "investment investment recovery CBM and Liquid Hydrocarbons" in succeeding Calendar Years until fully recovered.
(c) During the production period of a CBM Field, costs for an additional development development project incurred pursuant to Article 11.9 hereof and Deemed Interest thereon shall be recovered together with the unrecovered development costs and Deemed Interest thereon. If the development costs and Deemed Interest thereon have been fully recovered, then costs for the said additional development project and Deemed Interest thereon shall be recovered from the "investment recovery CBM and Liquid Hydrocarbons" of such CBM Field referred to in Article 13.2.2.2 herein in accordance with the provisions specified in Article 13.2 herein. The unrecovered costs for the additional development project and Deemed Interest thereon shall be carried forward to and recovered in succeeding Calendar Years until fully recovered.
(d) After the recovery of a CBM Field's development costs and Deemed Interest thereon and/or costs for the additional development project and Deemed Interest thereon from the said CBM Field by the Parties, the remainder of the "investment recovery CBM and Liquid Hydrocarbons" shall automatically be regarded as part of the "remainder CBM and Liquid Hydrocarbons" referred to in Article 13.2.3 herein. By the date of expiration of the production period of a CBM Field pursuant to Article 4.5 hereof, if any development costs and Deemed Interest thereon and/or costs for the additional development project incurred in respect of such CBM Field and Deemed Interest thereon have not yet been fully recovered, then such unrecovered costs and Deemed Interest thereon shall be regarded as a loss, and the Parties shall bear the loss in proportion to their respective participating interests.
13.2.3 The remainder of the Annual Gross Production of CBM and Liquid Hydrocarbons after the allocation referred to in Articles 13.2.1 and 13.2.2 herein shall be deemed as "remainder CBM and Liquid Hydrocarbons". Such "remainder CBM and Liquid Hydrocarbons" shall be divided into "share CBM and Liquid Hydrocarbons" of the Chinese side and "allocable remainder CBM and Liquid Hydrocarbons". The "allocable remainder CBM and Liquid Hydrocarbons" of each CBM Field in each Calendar Year shall be equal to the "remainder CBM and Liquid Hydrocarbons" of that Calendar Year multiplied by the factor (X) for each CBM Field within the Contract Area in that Calendar Year. The factor (X) of each CBM Field in each Calendar Year shall be determined in accordance with the following successive incremental tiers on the basis of the Annual Gross Production of CBM and Liquid Hydrocarbons from such CBM Field during that Calendar Year. ________________________________________________________________ Annual Gross Production Factors (X) in Percentage of Applicable to Each CBM and Liquid Hydrocarbons Production Tier of From Each CBM Field Each CBM Field Within (Million Cubic Meters) the Contract Area ________________________________________________________________ equal to or less than 500 Xl = 100 percent（100%） over 500 to 800 X2 = 99 percent（99%） over 800 to 1,200 X3 = 98 percent（98%） over 1,200 to 1,800 X4 = 96 percent（96%） over 1,800 to 2,500 X5 = 93 percent（93%） over 2,500 to 5,000 X6 = 89 percent（89%） over 5,000 X7 = 85 percent（85%） ________________________________________________________________ In the above table, it is assumed that each cubic meter of CBM has a heating value of thirty-six thousand and nine hundred sixty (36,960) BTU approximately. On this basis, a metric ton of Liquid Hydrocarbons in general will have a heating value of forty- three (43) million BTU, or equivalent to 1,164 cubic meters of CBM. 1.0 kilocalorie is equal to 3.97 BTU. Adjustments will be made if actual heating value exceeds or is less than the above by ten percent (10%) or more. An example of application in calculating the factor (X): Assuming that there are two producing commercial CBM Fields A and B within the Contract Area and the Annual Gross Production of CBM and Liquid Hydrocarbons from CBM Field A in a Calendar Year is three thousand and sixty four (3,064) million cubic meters, and that from CBM Field B is four thousand five hundred and ninety (4,590) million cubic meters, the factor (X) of CBM Field A in that Calendar Year shall be: 500X1 + 300X2 +400X3 + 600X4 + 700x5 + 564X6 X = -------------------------------------------------------------------------X 100% 3,064 and the factor (X) of CBM Field B in that Calendar Year shall be: 500X1 + 300X2 + 400X3 + 600X4 + 700X5 + 2090X6 X = -------------------------------------------------------------------------X 100% 4,590
13.2.4 The "allocable remainder CBM and Liquid Hydrocarbons" of each CBM Field in each Calendar Year referred to in Article 13.2.3 herein shall be shared by the Parties in proportion to their respective participating interests in the development costs, forty percent (40%) for CUCBM and sixty percent (60%) for the Contractor. In the event that CUCBM does not participate in the development of an CBM Field within the Contract Area, the Contractor shall obtain one hundred percent (100%) of the "allocable remainder CBM and Liquid Hydrocarbons" of that CBM Field. In the event that CUCBM participates to an extent less than forty percent (40%) in the development of an CBM Field within the Contract Area, the "allocable remainder CBM and Liquid Hydrocarbons" of such CBM Field in that Calendar Year shall be shared by the Parties in proportion to their actual respective participating interests in such CBM Field.
13.3 Pursuant to the method of allocation specified in this Article, the Contractor may obtain an aggregate amount of CBM and Liquid Hydrocarbons consisting of the following three categories and shall be subject to Article 1.7 of Annex II.
13.3.1 The total amount of CBM and Liquid Hydrocarbons as converted from the actual operating costs paid by the Contractor in all CBM Fields in proportion to its participating interests in the development costs stipulated in Article 13.2.2.1 hereof when recovering such costs;
13.3.2 The total amount of the "investment recovery CBM and Liquid Hydrocarbons" from all CBM Fields due to the Contractor provided for in Article 13.2.2.2 herein; and
13.3.3 The total amount of the "allocable remainder CBM and Liquid Hydrocarbons" of all CBM Fields due to the Contractor in accordance with Article 13.2.4 herein.
Appears in 1 contract
Samples: Production Sharing Contract
CBM Production and Allocation. 13.1 The Operator shall, in accordance with the production profile, adjusted as the case may be, set forth in the approved Overall Development Program for each CBM Field, work out a CBM production plan for each CBM Field in each Calendar Year and carry out CBM production pursuant to such plan.
13.2 The Annual Gross Production of CBM and Liquid Hydrocarbons of each CBM Field within the Contract Area in each Calendar Year during the production period shall be allocated allocated in accordance with the following sequence and proportions:
13.2.1 The percentages of the Annual Gross Production of CBM and Liquid Hydrocarbons specified in paragraphs (a) and (b) hereunder shall be used for payments of the Value Added Tax and of Royalty respectively and shall be paid in kind to the relevant authorities authorities of the Chinese Government through CUCBM.
(a) Value Added Tax shall be paid in accordance with relevant regulations of the People’s Republic of China; and
(b) Royalty shall be paid in accordance with relevant regulations of the People's ’s Republic of China.
13.2.2 Seventy percent (70%) of the Annual Gross Production of CBM and Liquid Hydrocarbons shall be deemed as the "“cost recovery CBM and Liquid Hydrocarbons" ” and shall be used for payments or for cost recovery in the following sequence:
13.2.2.1 Payment in kind for the operating costs actually incurred (and any abandonment costs accrued per Article 4) but not yet recovered recovered by the Parties pursuant to Article 12.2.1 hereof based on the price of the said "“cost recovery CBM and Liquid Hydrocarbons" ” determined in accordance with Article 14 hereof.
13.2.2.2 The remainder of the "“cost recovery CBM and Liquid Hydrocarbons" ” shall, after payment for operating costs in accordance with Article 13.2.2.1 herein, be deemed as "investment recovery CBM and Liquid Hydrocarbons". Such "“investment recovery CBM and Liquid Hydrocarbons" ”. Such “investment recovery CBM and Liquid Hydrocarbons” shall be used for the recovery recovery of the exploration exploration costs in respect of the Contract Area which were incurred and not yet recovered by the Contractor, and shall be used for the recovery of the development costs in respect of the CBM Field itself which were incurred and not yet recovered by CUCBM and the Contractor in accordance with Articles 12.2.2 and 12.2.3 hereof, and Deemed Interest Interest thereon. The method of recovery and the recovery sequence are as follows:
(a) Beginning in the Calendar Year during which the production of any CBM Field within the Contract Area commences, the "“investment recovery recovery CBM and Liquid Hydrocarbons" ” referred to in Article 13.2.2.2 herein, based on the price which has been determined in accordance with Article 14 hereof, shall be paid in kind first to the companies comprising comprising the Contractor for the recovery recovery of the exploration costs which were incurred in respect of, and have not yet been recovered from, the Contract Area. The unrecovered exploration costs shall be carried forward to and recovered from the “investment recovery CBM and Liquid Hydrocarbons” in succeeding Calendar Years until fully recovered by the Contractor.
(b) Beginning in the Calendar Year during which the exploration costs incurred by the Contractor in respect of the Contract Area have been fully recovered, the remainder of the "“investment recovery CBM and Liquid Hydrocarbons" ” of a CBM Field shall be used for the simultaneous recovery of the development costs incurred and not yet recovered respectively by CUCBM and the Contractor Contractor and Deemed Interest thereon in respect of such CBM Field in proportion proportion to their respective participating interests therein based on the price of such remainder of the "“investment recovery CBM and Liquid Hydrocarbons" ” determined in accordance with Article 14 hereof. The unrecovered development costs and Deemed Interest thereon shall be carried forward to and recovered from the "investment “investment recovery CBM and Liquid Hydrocarbons" ” in succeeding Calendar Years until fully recovered.
(c) During the production period of a CBM Field, costs for an additional development development project incurred pursuant to Article 11.9 hereof and Deemed Interest thereon thereon shall be recovered together with the unrecovered unrecovered development costs and Deemed Interest thereon. If the development costs and Deemed Interest thereon have been fully recovered, then costs for the said additional development project and Deemed Interest thereon shall be recovered from the "“investment recovery CBM and Liquid Hydrocarbons" ” of such CBM Field referred to in Article 13.2.2.2 herein in accordance with the provisions provisions specified in Article 13.2 herein. The unrecovered costs for the additional development project and Deemed Interest thereon shall be carried forward forward to and recovered in succeeding Calendar Years until fully recoveredrecovered.
(d) After the recovery of a CBM Field's ’s development costs and Deemed Interest thereon and/or costs for the additional development project and Deemed Interest thereon from the said CBM Field by the Parties, the remainder remainder of the "“investment recovery CBM and Liquid Hydrocarbons" ” shall automatically be regarded as part of the "“remainder CBM and Liquid Hydrocarbons" ” referred to in Article 13.2.3 herein. By the date of expiration of the production period of a CBM Field pursuant to Article 4.5 hereof, if any development costs and Deemed Interest thereon Interest thereon and/or costs for the additional development project incurred in respect of such CBM Field and Deemed Interest thereon have not yet been fully recoveredrecovered, then such unrecovered costs and Deemed Interest thereon thereon shall be regarded as a loss, and the Parties shall bear the loss in proportion proportion to their respective participating participating interests.
13.2.3 The remainder of the Annual Gross Production of CBM and Liquid Hydrocarbons after the allocation referred to in Articles 13.2.1 and 13.2.2 herein shall be deemed as "“remainder CBM and Liquid Hydrocarbons"”. Such "“remainder CBM and Liquid Hydrocarbons" ” shall be divided into "“share CBM and Liquid Hydrocarbons" ” of the Chinese side and "“allocable remainder CBM and Liquid Hydrocarbons"”. The "“allocable remainder CBM and Liquid Hydrocarbons" ” of each CBM Field in each Calendar Year shall be equal to the "“remainder CBM and Liquid Hydrocarbons" ” of that Calendar Year multiplied by the factor (X) for each CBM Field within the Contract Area in that Calendar Year. The factor (X) of each CBM Field in each Calendar Year shall be determined in accordance with the following successive incremental tiers on the basis of the Annual Gross Production of CBM and Liquid Hydrocarbons from such CBM Field during that Calendar Year. ________________________________________________________________ Annual Gross Production Factors (X) in Percentage of Applicable to Each CBM and Liquid Hydrocarbons Production Tier of From Each CBM Field Each CBM Field Within (Million Cubic Meters) the Contract Area ________________________________________________________________ equal to or less than 500 Xl = 100 percent（10099 Percent ( 99%） ) over 500 to 800 X2 = 99 percent（99Percent ( 99%） ) over 800 to 1,200 X3 = 98 percent（98Percent ( 98%） ) over 1,200 to 1,800 X4 = 96 percent（9697 Percent ( 97%） ) over 1,800 to 2,500 X5 = 93 percent（9396 Percent ( 96%） ) over 2,500 to 5,000 X6 = 89 percent（8993 Percent ( 93%） ) over 5,000 X7 = 85 percent（85X7= 90 Percent ( 90%） ________________________________________________________________ ) In the above table, it is assumed that each cubic meter of CBM has a heating value of thirty-six thousand and nine hundred sixty (36,960) BTU approximately. On this basis, a metric ton of Liquid Hydrocarbons in general will have a heating value of forty- three (43) million BTU, or equivalent to 1,164 cubic meters of CBM. 1.0 kilocalorie kilo calorie is equal to 3.97 BTU. Adjustments will be made if actual heating value exceeds or is less than the above by ten percent (10%) or more. An example of application in calculating the factor (X): Assuming that there are two producing commercial CBM Fields A and B within the Contract Area and the Annual Gross Production of CBM and Liquid Hydrocarbons from CBM Field A in a Calendar Year is three thousand and sixty four (3,064) million cubic meters, and that from CBM Field B is four thousand five hundred and ninety (4,590) million cubic meters, the factor (X) of CBM Field A in that Calendar Year shall be: 500X1 + 300X2 +400X3 + 600X4 + 700x5 + 564X6 564X 6 X = -------------------------------------------------------------------------X X 100% 3,064 and the factor (X) of CBM Field B in that Calendar Year shall be: 500X1 + 300X2 + 400X3 + 600X4 + 700X5 + 2090X6 2090X 6 X = -------------------------------------------------------------------------X X 100% 4,590%
13.2.4 The "“allocable remainder CBM and Liquid Hydrocarbons" ” of each CBM Field in each Calendar Year referred to in Article 13.2.3 herein shall be shared by the Parties in proportion to their respective participating interests in the development costs, forty percent (4040 %) for CUCBM and sixty percent (60%) for the Contractor. In the event that CUCBM does not participate in the development of an CBM Field within the Contract Area, the Contractor shall obtain one hundred percent (100%) of the "“allocable remainder CBM and Liquid Hydrocarbons" ” of that CBM Field. In the event that CUCBM participates to an extent less than forty 40 percent (4040 %) in the development of an CBM Field within the Contract Area, the "“allocable remainder CBM and Liquid Hydrocarbons" ” of such CBM Field in that Calendar Year shall be shared by the Parties in proportion to their actual respective participating interests in such CBM Field.
13.3 Pursuant to the method of allocation specified in this Article, the Contractor may obtain an aggregate amount of CBM and Liquid Hydrocarbons consisting of the following three categories and shall be subject to Article 1.7 of Annex II.
13.3.1 The total amount of CBM and Liquid Hydrocarbons as converted from the actual operating costs paid by the Contractor in all CBM Fields in proportion to its participating interests in the development costs stipulated in Article 13.2.2.1 hereof when recovering such costs;
13.3.2 The total amount of the "investment recovery CBM and Liquid Hydrocarbons" from all CBM Fields due to the Contractor provided for in Article 13.2.2.2 herein; and
13.3.3 The total amount of the "allocable remainder CBM and Liquid Hydrocarbons" of all CBM Fields due to the Contractor in accordance with Article 13.2.4 herein.
Appears in 1 contract
Samples: Production Sharing Contract (Pacific Asia Petroleum Inc)
CBM Production and Allocation. 13.1 The Operator shall, in accordance with the production profile, adjusted as the case may be, set forth in the approved Overall Development Program for each CBM Field, work out a CBM production plan for each CBM Field in each Calendar Year and carry out CBM production pursuant to such plan.
13.2 The Annual Gross Production of CBM and Liquid Hydrocarbons of each CBM Field within the Contract Area in each Calendar Year during the production period shall be allocated allocated in accordance with the following sequence and proportions:
13.2.1 The percentages of the Annual Gross Production of CBM and Liquid Hydrocarbons specified in paragraphs (a) and (b) hereunder shall be used for payments of the Value Added Tax and of Royalty respectively and shall be paid in kind to the relevant authorities authorities of the Chinese Government through CUCBM.
(a) Value Added Tax shall be paid in accordance with relevant regulations of the People’s 's Republic of China; and
(b) Royalty shall be paid in accordance with relevant regulations of the People's Republic of China.
13.2.2 Seventy percent (70%) of the Annual Gross Production of CBM and Liquid Hydrocarbons shall be deemed as the "cost recovery CBM and Liquid Hydrocarbons" and shall be used for payments or for cost recovery in the following sequence:
13.2.2.1 Payment in kind for the operating costs actually incurred but not yet recovered recovered by the Parties pursuant to Article 12.2.1 hereof based on the price of the said "cost recovery CBM and Liquid Hydrocarbons" determined in accordance with Article 14 hereof.
13.2.2.2 The remainder of the "cost recovery CBM and Liquid Hydrocarbons" shall, after payment for operating costs in accordance with Article 13.2.2.1 13.
2.2.1 herein, be deemed as "investment recovery re- covery CBM and Liquid Hydrocarbons". Such "investment recovery CBM and Liquid Hydrocarbons" shall be used for the recovery recovery of the exploration exploration costs in respect of the Contract Area which were incurred and not yet recovered by the Contractor, and shall be used for the recovery of the development costs in respect of the CBM Field itself which were incurred and not yet recovered by CUCBM and the Contractor in accordance with Articles 12.2.2 and 12.2.3 hereof, and Deemed Interest Interest thereon. The method of recovery and the recovery sequence are as follows:
(a) Beginning in the Calendar Year during which the production of any CBM Field within the Contract Area commences, the "investment recovery recovery CBM and Liquid Hydrocarbons" referred to in Article 13.2.2.2 herein, based on the price which has been determined in accordance with Article 14 hereof, shall be paid in kind first to the companies comprising comprising the Contractor for the recovery recovery of the exploration costs which were incurred in respect of, and have not yet been recovered from, the Contract Area. The unrecovered exploration costs shall be carried forward to and recovered from the “"investment recovery CBM and Liquid Hydrocarbons” " in succeeding Calendar Years until fully recovered by the Contractor.
(b) Beginning in the Calendar Year during which the exploration costs incurred by the Contractor in respect of the Contract Area have been fully recovered, the remainder of the "investment recovery CBM and Liquid Hydrocarbons" of a CBM Field shall be used for the simultaneous recovery of the development costs incurred and not yet recovered respectively by CUCBM and the Contractor Contractor and Deemed Interest thereon in respect of such CBM Field in proportion proportion to their respective participating interests therein based on the price of such remainder of the "investment recovery CBM and Liquid Hydrocarbons" determined in accordance with Article 14 hereof. The unrecovered development costs and Deemed Interest thereon shall be carried forward to and recovered from the "investment investment recovery CBM and Liquid Hydrocarbons" in succeeding Calendar Years until fully recovered.
(c) During the production period of a CBM Field, costs for an additional development development project incurred pursuant to Article 11.9 hereof and Deemed Interest thereon thereon shall be recovered together with the unrecovered unrecovered development costs and Deemed Interest thereon. If the development costs and Deemed Interest thereon have been fully recovered, then costs for the said additional development project and Deemed Interest thereon shall be recovered from the "investment recovery CBM and Liquid Hydrocarbons" of such CBM Field referred to in Article 13.2.2.2 13.
2.2.2 herein in accordance with the provisions provisions specified in Article 13.2 herein. The unrecovered costs for the additional development project and Deemed Interest thereon shall be carried forward to and recovered in succeeding Calendar Years until fully recovered.
(d) After the recovery of a CBM Field's development costs and Deemed Interest thereon and/or costs for the additional development project and Deemed Interest thereon from the said CBM Field by the Parties, the remainder of the "investment recovery CBM and Liquid Hydrocarbons" shall automatically be regarded as part of the "remainder CBM and Liquid Hydrocarbons" referred to in Article 13.2.3 herein. By the date of expiration of the production period of a CBM Field pursuant to Article 4.5 hereof, if any development costs and Deemed Interest thereon and/or costs for the additional development project incurred in respect of such CBM Field and Deemed Interest thereon have not yet been fully recovered, then such unrecovered costs and Deemed Interest thereon shall be regarded as a loss, and the Parties shall bear the loss in proportion to their respective participating interests.
13.2.3 The remainder of the Annual Gross Production of CBM and Liquid Hydrocarbons after the allocation referred to in Articles 13.2.1 and 13.2.2 herein shall be deemed as "remainder CBM and Liquid Hydrocarbons". Such "remainder CBM and Liquid Hydrocarbons" shall be divided into "share CBM and Liquid Hydrocarbons" of the Chinese side and "allocable remainder CBM and Liquid Hydrocarbons". The "allocable remainder CBM and Liquid Hydrocarbons" of each CBM Field in each Calendar Year shall be equal to the "remainder CBM and Liquid Hydrocarbons" of that Calendar Year multiplied by the factor (X) for each CBM Field within the Contract Area in that Calendar Year. The factor (X) of each CBM Field in each Calendar Year shall be determined in accordance with the following successive incremental tiers on the basis of the Annual Gross Production of CBM and Liquid Hydrocarbons from such CBM Field during that Calendar Year. ________________________________________________________________ Annual Gross Production Factors (X) in Percentage of Applicable to Each CBM and Liquid Hydrocarbons Production Tier of From Each CBM Field Each CBM Field Within (Million Cubic Meters) the Contract Area ________________________________________________________________ equal to or less than 500 Xl = 100 percent（100%） over 500 to 800 X2 = 99 percent（99%） over 800 to 1,200 X3 = 98 percent（98%） over 1,200 to 1,800 X4 = 96 percent（96%） over 1,800 to 2,500 X5 = 93 percent（93%） over 2,500 to 5,000 X6 = 89 percent（89%） over 5,000 X7 = 85 percent（85%） ________________________________________________________________ In the above table, it is assumed that each cubic meter of CBM has a heating value of thirty-six thousand and nine hundred sixty (36,960) BTU approximately. On this basis, a metric ton of Liquid Hydrocarbons in general will have a heating value of forty- three (43) million BTU, or equivalent to 1,164 cubic meters of CBM. 1.0 kilocalorie is equal to 3.97 BTU. Adjustments will be made if actual heating value exceeds or is less than the above by ten percent (10%) or more. An example of application in calculating the factor (X): Assuming that there are two producing commercial CBM Fields A and B within the Contract Area and the Annual Gross Production of CBM and Liquid Hydrocarbons from CBM Field A in a Calendar Year is three thousand and sixty four (3,064) million cubic meters, and that from CBM Field B is four thousand five hundred and ninety (4,590) million cubic meters, the factor (X) of CBM Field A in that Calendar Year shall be: 500X1 + 300X2 +400X3 + 600X4 + 700x5 + 564X6 X = -------------------------------------------------------------------------X 100% 3,064 and the factor (X) of CBM Field B in that Calendar Year shall be: 500X1 + 300X2 + 400X3 + 600X4 + 700X5 + 2090X6 X = -------------------------------------------------------------------------X 100% 4,590
13.2.4 The "allocable remainder CBM and Liquid Hydrocarbons" of each CBM Field in each Calendar Year referred to in Article 13.2.3 herein shall be shared by the Parties in proportion to their respective participating interests in the development costs, forty percent (40%) for CUCBM and sixty percent (60%) for the Contractor. In the event that CUCBM does not participate in the development of an CBM Field within the Contract Area, the Contractor shall obtain one hundred percent (100%) of the "allocable remainder CBM and Liquid Hydrocarbons" of that CBM Field. In the event that CUCBM participates to an extent less than forty percent (40%) in the development of an CBM Field within the Contract Area, the "allocable remainder CBM and Liquid Hydrocarbons" of such CBM Field in that Calendar Year shall be shared by the Parties in proportion to their actual respective participating interests in such CBM Field.
13.3 Pursuant to the method of allocation specified in this Article, the Contractor may obtain an aggregate amount of CBM and Liquid Hydrocarbons consisting of the following three categories and shall be subject to Article 1.7 of Annex II.
13.3.1 The total amount of CBM and Liquid Hydrocarbons as converted from the actual operating costs paid by the Contractor in all CBM Fields in proportion to its participating interests in the development costs stipulated in Article 13.2.2.1 hereof when recovering such costs;
13.3.2 The total amount of the "investment recovery CBM and Liquid Hydrocarbons" from all CBM Fields due to the Contractor provided for in Article 13.2.2.2 herein; and
13.3.3 The total amount of the "allocable remainder CBM and Liquid Hydrocarbons" of all CBM Fields due to the Contractor in accordance with Article 13.2.4 herein.13.2
Appears in 1 contract
CBM Production and Allocation. 13.1 The Operator shall, in accordance with the production profile, adjusted as the case may be, set forth in the approved Overall Development Program for each CBM Field, work out a CBM production and joint marketing plan for each CBM Field in each Calendar Year and carry out CBM production pursuant to such plan. Such plan shall have the Operator receiving all proceeds from sales and making payments and accounting for cost recovery as detailed below.
13.2 The Annual Gross Production of CBM and Liquid Hydrocarbons of each CBM Field within the Contract Area in each Calendar Year during the production period shall be allocated allocated in accordance with the following sequence and proportions:
13.2.1 The percentages of the Annual Gross Production of CBM and Liquid Hydrocarbons specified in paragraphs (a) and (b) hereunder shall be used for payments of the Value Added Tax and of Royalty respectively and shall be paid in kind to the relevant authorities authorities of the Chinese Government through CUCBM.
(a) Value Added Tax Five percent (5%) of the Annual Gross Production of CBM and Liquid Hydrocarbons shall be paid in accordance with relevant regulations kind to the competent authorities for payment of the People’s Republic of China; and
(b) Royalty shall be paid Value Added Tax in accordance with relevant rules and regulations of the People's Republic of ChinaChina through CUCBM; and
(b) Payment of Royalty shall be made pursuant to the relevant rules and regulations of the People's Republic of China through CUCBM.
13.2.2 Seventy Seventy-five percent (7075%) of the Annual Gross Production of CBM and Liquid Hydrocarbons shall be deemed as the "cost recovery CBM and Liquid Hydrocarbons" and shall be used for payments or for cost recovery in the following sequence:
13.2.2.1 Payment in kind for the operating costs actually incurred but not yet recovered recovered by the Parties pursuant to Article 12.2.1 hereof based on the price of the said "cost recovery CBM and Liquid Hydrocarbons" determined in accordance with Article 14 hereof.
13.2.2.2 The remainder of the "cost recovery CBM and Liquid Hydrocarbons" shall, after payment for operating costs in accordance with Article 13.2.2.1 13.
2.2.1 herein, be deemed as "investment recovery recovery CBM and Liquid Hydrocarbons". Such "investment recovery CBM and Liquid Hydrocarbons" shall be used for the recovery recovery of the exploration exploration costs incurred and not yet recovered by Contractor in respect of the Contract Area which were and for the recovery of Pre-Contract Costs incurred and not yet recovered by CUCBM in respect of the Contractor, Contract Area.. The "investment recovery CBM and Liquid Hydrocarbons" shall also be used for the recovery of the development costs in respect of the CBM Field itself which were have been incurred and but not yet recovered by CUCBM and the Contractor in accordance with Articles 12.2.2 and 12.2.3 hereof, and Deemed Interest Interest thereon. The method of recovery and the recovery sequence are as follows:
(a) Beginning in the Calendar Year during which the production of any CBM Field within the Contract Area commences, the "investment recovery recovery CBM and Liquid Hydrocarbons" referred to in Article 13.2.2.2 herein, based on the price which has been determined in accordance with Article 14 hereof, shall be paid in kind first simultaneously on a 50% - 50% basis to the companies comprising the Contractor for the recovery recovery of the exploration costs which were have been incurred 23 in respect of, but have not yet been recovered from, the Contract Area and to CUCBM for the recovery of Pre-Contract Costs which have been incurred in respect of, and but have not yet been recovered from, the Contract Area. If CUCBM recovers its Pre-Contract Costs prior to Contractor's recovery of its exploration costs, that portion of the "investment recovery CBM and Liquid Hydrocarbons" previously paid to CUCBM shall then be paid to Contractor for the cost recovery of Contractor's unrecovered exploration costs.
(a) from all CBM Fields in the Contract Area during the recovery of exploration costs shall be Two Million Eight Hundred Forty Thousand U.S. dollars (US$2,840,000). The unrecovered exploration costs and the unrecovered Pre-Contract Costs shall be carried forward to and recovered from the “"investment recovery CBM and Liquid Hydrocarbons” " in succeeding Calendar Years until fully recovered by the Contractor.
(b) Beginning in the Calendar Year during which the exploration costs incurred by the Contractor and the Pre-Contract Costs incurred by CUCBM in respect of the Contract Area have been fully recovered, the remainder of the "investment recovery CBM and Liquid Hydrocarbons" of a CBM Field shall be used for the simultaneous recovery of the development costs incurred and not yet recovered respectively by CUCBM and the Contractor Contractor and Deemed Interest thereon in respect of such CBM Field in proportion proportion to their respective participating interests therein based on the price of such remainder of the "investment recovery CBM and Liquid Hydrocarbons" determined in accordance with Article 14 hereof. The unrecovered development costs and Deemed Interest thereon shall be carried forward to and recovered from the "investment investment recovery CBM and Liquid Hydrocarbons" in succeeding Calendar Years until fully recovered.
(c) During the production period of a CBM Field, costs for an additional development development project incurred pursuant to Article 11.9 hereof and Deemed Interest thereon thereon shall be recovered together with the unrecovered unrecovered development costs and Deemed Interest thereon. If the development costs and Deemed Interest thereon have been fully recovered, then costs for the said additional development project and Deemed Interest thereon shall be recovered from the "investment recovery CBM and Liquid Hydrocarbons" of such CBM Field referred to in Article 13.2.2.2 herein in accordance with the provisions specified in Article 13.2 herein. The unrecovered costs for the additional development project and Deemed Interest thereon shall be carried forward to and recovered in succeeding Calendar Years until fully recovered13.
(d) After the recovery of a CBM Field's development costs and Deemed Interest thereon and/or costs for the additional development project and Deemed Interest thereon from the said CBM Field by the Parties, the remainder of the "investment recovery CBM and Liquid Hydrocarbons" shall automatically be regarded as part of the "remainder CBM and Liquid Hydrocarbons" referred to in Article 13.2.3 herein. By the date of expiration of the production period of a CBM Field pursuant to Article 4.5 hereof, if any development costs and Deemed Interest thereon and/or costs for the additional development project incurred in respect of such CBM Field and Deemed Interest thereon have not yet been fully recovered, then such unrecovered costs and Deemed Interest thereon shall be regarded as a loss, and the Parties shall bear the loss in proportion to their respective participating interests.
13.2.3 The remainder of the Annual Gross Production of CBM and Liquid Hydrocarbons after the allocation referred to in Articles 13.2.1 and 13.2.2 herein shall be deemed as "remainder CBM and Liquid Hydrocarbons". Such "remainder CBM and Liquid Hydrocarbons" shall be divided into "share CBM and Liquid Hydrocarbons" of the Chinese side and "allocable remainder CBM and Liquid Hydrocarbons". The "allocable remainder CBM and Liquid Hydrocarbons" of each CBM Field in each Calendar Year shall be equal to the "remainder CBM and Liquid Hydrocarbons" of that Calendar Year multiplied by the factor (X) for each CBM Field within the Contract Area in that Calendar Year. The factor (X) of each CBM Field in each Calendar Year shall be determined in accordance with the following successive incremental tiers on the basis of the Annual Gross Production of CBM and Liquid Hydrocarbons from such CBM Field during that Calendar Year. ________________________________________________________________ Annual Gross Production Factors (X) in Percentage of Applicable to Each CBM and Liquid Hydrocarbons Production Tier of From Each CBM Field Each CBM Field Within (Million Cubic Meters) the Contract Area ________________________________________________________________ equal to or less than 500 Xl = 100 percent（100%） over 500 to 800 X2 = 99 percent（99%） over 800 to 1,200 X3 = 98 percent（98%） over 1,200 to 1,800 X4 = 96 percent（96%） over 1,800 to 2,500 X5 = 93 percent（93%） over 2,500 to 5,000 X6 = 89 percent（89%） over 5,000 X7 = 85 percent（85%） ________________________________________________________________ In the above table, it is assumed that each cubic meter of CBM has a heating value of thirty-six thousand and nine hundred sixty (36,960) BTU approximately. On this basis, a metric ton of Liquid Hydrocarbons in general will have a heating value of forty- three (43) million BTU, or equivalent to 1,164 cubic meters of CBM. 1.0 kilocalorie is equal to 3.97 BTU. Adjustments will be made if actual heating value exceeds or is less than the above by ten percent (10%) or more. An example of application in calculating the factor (X): Assuming that there are two producing commercial CBM Fields A and B within the Contract Area and the Annual Gross Production of CBM and Liquid Hydrocarbons from CBM Field A in a Calendar Year is three thousand and sixty four (3,064) million cubic meters, and that from CBM Field B is four thousand five hundred and ninety (4,590) million cubic meters, the factor (X) of CBM Field A in that Calendar Year shall be: 500X1 + 300X2 +400X3 + 600X4 + 700x5 + 564X6 X = -------------------------------------------------------------------------X 100% 3,064 and the factor (X) of CBM Field B in that Calendar Year shall be: 500X1 + 300X2 + 400X3 + 600X4 + 700X5 + 2090X6 X = -------------------------------------------------------------------------X 100% 4,590
13.2.4 The "allocable remainder CBM and Liquid Hydrocarbons" of each CBM Field in each Calendar Year referred to in Article 13.2.3 herein shall be shared by the Parties in proportion to their respective participating interests in the development costs, forty percent (40%) for CUCBM and sixty percent (60%) for the Contractor. In the event that CUCBM does not participate in the development of an CBM Field within the Contract Area, the Contractor shall obtain one hundred percent (100%) of the "allocable remainder CBM and Liquid Hydrocarbons" of that CBM Field. In the event that CUCBM participates to an extent less than forty percent (40%) in the development of an CBM Field within the Contract Area, the "allocable remainder CBM and Liquid Hydrocarbons" of such CBM Field in that Calendar Year shall be shared by the Parties in proportion to their actual respective participating interests in such CBM Field.
13.3 Pursuant to the method of allocation specified in this Article, the Contractor may obtain an aggregate amount of CBM and Liquid Hydrocarbons consisting of the following three categories and shall be subject to Article 1.7 of Annex II.
13.3.1 The total amount of CBM and Liquid Hydrocarbons as converted from the actual operating costs paid by the Contractor in all CBM Fields in proportion to its participating interests in the development costs stipulated in Article 13.2.2.1 hereof when recovering such costs;
13.3.2 The total amount of the "investment recovery CBM and Liquid Hydrocarbons" from all CBM Fields due to the Contractor provided for in Article 13.2.2.2 herein; and
13.3.3 The total amount of the "allocable remainder CBM and Liquid Hydrocarbons" of all CBM Fields due to the Contractor in accordance with Article 13.2.4 herein.
Appears in 1 contract
CBM Production and Allocation. 13.1 The Operator shall, in accordance with the production profile, adjusted as the case may be, set forth in the approved Overall Development Program for each CBM Field, work out a CBM production plan for each CBM Field in each Calendar Year and carry out CBM production pursuant to such plan.
13.2 The Annual Gross Production of CBM and Liquid Hydrocarbons of each CBM Field within the Contract Area in each Calendar Year during the production period shall be allocated in accordance with the following sequence and proportions:
13.2.1 The percentages of the Annual Gross Production of CBM and Liquid Hydrocarbons specified in paragraphs (a) and (b) hereunder shall be used for payments of the Value Added Tax and of Royalty respectively and shall be paid in kind to the relevant authorities of the Chinese Government through CUCBM.
(a) Value Added Tax shall be paid in accordance with relevant regulations of the People’s Republic of China; and
(b) Royalty shall be paid in accordance with relevant regulations of the People's Republic of China.
13.2.2 Seventy percent (70%) of the Annual Gross Production of CBM and Liquid Hydrocarbons shall be deemed as the "cost recovery CBM and Liquid Hydrocarbons" and shall be used for payments or for cost recovery in the following sequence:
13.2.2.1 Payment in kind for the operating costs actually incurred but not yet recovered by the Parties pursuant to Article 12.2.1 hereof based on the price of the said "cost recovery CBM and Liquid Hydrocarbons" determined in accordance with Article 14 hereof.
13.2.2.2 The remainder of the "cost recovery CBM and Liquid Hydrocarbons" shall, after payment for operating costs in accordance with Article 13.2.2.1 herein, be deemed as "investment recovery CBM and Liquid Hydrocarbons". Such "investment recovery CBM and Liquid Hydrocarbons" shall be used for the recovery of the exploration costs in respect of the Contract Area which were incurred and not yet recovered by the Contractor, and shall be used for the recovery of the development costs in respect of the CBM Field itself which were incurred and not yet recovered by CUCBM and the Contractor in accordance with Articles 12.2.2 and 12.2.3 hereof, and Deemed Interest thereon. The method of recovery and the recovery sequence are as follows:
(a) Beginning in the Calendar Year during which the production of any CBM Field within the Contract Area commences, the "investment recovery CBM and Liquid Hydrocarbons" referred to in Article 13.2.2.2 herein, based on the price which has been determined in accordance with Article 14 hereof, shall be paid in kind first to the companies comprising the Contractor for the recovery of the exploration costs which were incurred in respect of, and have not yet been recovered from, the Contract Area. The unrecovered exploration costs shall be carried forward to and recovered from the “investment recovery CBM and Liquid Hydrocarbons” in succeeding Calendar Years until fully recovered by the Contractor.
(b) Beginning in the Calendar Year during which the exploration costs incurred by the Contractor in respect of the Contract Area have been fully recovered, the remainder of the "investment recovery CBM and Liquid Hydrocarbons" of a CBM Field shall be used for the simultaneous recovery of the development costs incurred and not yet recovered respectively by CUCBM and the Contractor and Deemed Interest thereon in respect of such CBM Field in proportion to their respective participating interests therein based on the price of such remainder of the "investment recovery CBM and Liquid Hydrocarbons" determined in accordance with Article 14 hereof. The unrecovered development costs and Deemed Interest thereon shall be carried forward to and recovered from the "investment recovery CBM and Liquid Hydrocarbons" in succeeding Calendar Years until fully recovered.
(c) During the production period of a CBM Field, costs for an additional development project incurred pursuant to Article 11.9 hereof and Deemed Interest thereon shall be recovered together with the unrecovered development costs and Deemed Interest thereon. If the development costs and Deemed Interest thereon have been fully recovered, then costs for the said additional development project and Deemed Interest thereon shall be recovered from the "investment recovery CBM and Liquid Hydrocarbons" of such CBM Field referred to in Article 13.2.2.2 herein in accordance with the provisions specified in Article 13.2 herein. The unrecovered costs for the additional development project and Deemed Interest thereon shall be carried forward to and recovered in succeeding Calendar Years until fully recovered.
(d) After the recovery of a CBM Field's development costs and Deemed Interest thereon and/or costs for the additional development project and Deemed Interest thereon from the said CBM Field by the Parties, the remainder of the "investment recovery CBM and Liquid Hydrocarbons" shall automatically be regarded as part of the "remainder CBM and Liquid Hydrocarbons" referred to in Article 13.2.3 herein. By the date of expiration of the production period of a CBM Field pursuant to Article 4.5 hereof, if any development costs and Deemed Interest thereon and/or costs for the additional development project incurred in respect of such CBM Field and Deemed Interest thereon have not yet been fully recovered, then such unrecovered costs and Deemed Interest thereon shall be regarded as a loss, and the Parties shall bear the loss in proportion to their respective participating interests.
13.2.3 The remainder of the Annual Gross Production of CBM and Liquid Hydrocarbons after the allocation referred to in Articles 13.2.1 and 13.2.2 herein shall be deemed as "remainder CBM and Liquid Hydrocarbons". Such "remainder CBM and Liquid Hydrocarbons" shall be divided into "share CBM and Liquid Hydrocarbons" of the Chinese side and "allocable remainder CBM and Liquid Hydrocarbons". The "allocable remainder CBM and Liquid Hydrocarbons" of each CBM Field in each Calendar Year shall be equal to the "remainder CBM and Liquid Hydrocarbons" of that Calendar Year multiplied by the factor (X) for each CBM Field within the Contract Area in that Calendar Year. The factor (X) of each CBM Field in each Calendar Year shall be determined in accordance with the following successive incremental tiers on the basis of the Annual Gross Production of CBM and Liquid Hydrocarbons from such CBM Field during that Calendar Year. ________________________________________________________________ Annual Gross Production Factors (X) in Percentage of Applicable to Each CBM and Liquid Hydrocarbons Production Tier of From Each CBM Field Each CBM Field Within (Million Cubic Meters) the Contract Area ________________________________________________________________ equal to or less than 500 Xl = 100 percent（100%） over 500 to 800 X2 = 99 percent（99%） over 800 to 1,200 X3 = 98 percent（98%） over 1,200 to 1,800 X4 = 96 percent（96%） over 1,800 to 2,500 X5 = 93 percent（93%） over 2,500 to 5,000 X6 = 89 percent（89%） over 5,000 X7 = 85 percent（85%） ________________________________________________________________ In the above table, it is assumed that each cubic meter of CBM has a heating value of thirty-six thousand and nine hundred sixty (36,960) BTU approximately. On this basis, a metric ton of Liquid Hydrocarbons in general will have a heating value of forty- three (43) million BTU, or equivalent to 1,164 cubic meters of CBM. 1.0 kilocalorie is equal to 3.97 BTU. Adjustments will be made if actual heating value exceeds or is less than the above by ten percent (10%) or more. An example of application in calculating the factor (X): Assuming that there are two producing commercial CBM Fields A and B within the Contract Area and the Annual Gross Production of CBM and Liquid Hydrocarbons from CBM Field A in a Calendar Year is three thousand and sixty four (3,064) million cubic meters, and that from CBM Field B is four thousand five hundred and ninety (4,590) million cubic meters, the factor (X) of CBM Field A in that Calendar Year shall be: 500X1 + 300X2 +400X3 + 600X4 + 700x5 + 564X6 X = -------------------------------------------------------------------------X 100% 3,064 and the factor (X) of CBM Field B in that Calendar Year shall be: 500X1 + 300X2 + 400X3 + 600X4 + 700X5 + 2090X6 X = -------------------------------------------------------------------------X 100% 4,590
13.2.4 The "allocable remainder CBM and Liquid Hydrocarbons" of each CBM Field in each Calendar Year referred to in Article 13.2.3 herein shall be shared by the Parties in proportion to their respective participating interests in the development costs, forty percent (40%) for CUCBM and sixty percent (60%) for the Contractor. In the event that CUCBM does not participate in the development of an CBM Field within the Contract Area, the Contractor shall obtain one hundred percent (100%) of the "allocable remainder CBM and Liquid Hydrocarbons" of that CBM Field. In the event that CUCBM participates to an extent less than forty percent (40%) in the development of an CBM Field within the Contract Area, the "allocable remainder CBM and Liquid Hydrocarbons" of such CBM Field in that Calendar Year shall be shared by the Parties in proportion to their actual respective participating interests in such CBM Field.
13.3 Pursuant to the method of allocation specified in this Article, the Contractor may obtain an aggregate amount of CBM and Liquid Hydrocarbons consisting of the following three categories and shall be subject to Article 1.7 of Annex II.
13.3.1 The total amount of CBM and Liquid Hydrocarbons as converted from the actual operating costs paid by the Contractor in all CBM Fields in proportion to its participating interests in the development costs stipulated in Article 13.2.2.1 hereof when recovering such costs;
13.3.2 The total amount of the "investment recovery CBM and Liquid Hydrocarbons" from all CBM Fields due to the Contractor provided for in Article 13.2.2.2 herein; and
13.3.3 The total amount of the "allocable remainder CBM and Liquid Hydrocarbons" of all CBM Fields due to the Contractor in accordance with Article 13.2.4 herein.to
Appears in 1 contract
Samples: Production Sharing Contract (Pacific Asia China Energy Inc.)
