PRODUCTION SHARING STATEMENT Clause Samples
A Production Sharing Statement clause defines the requirements for reporting and documenting the allocation of produced resources, such as oil or gas, between the contracting parties. Typically, this clause outlines the format, frequency, and content of statements that detail how production is divided, including calculations of cost recovery and profit sharing. Its core practical function is to ensure transparency and accountability in the distribution of production, thereby minimizing disputes and clarifying each party’s entitlements.
PRODUCTION SHARING STATEMENT. Within sixty (60) days following the end of each Calendar Year, the Contractor shall submit to the Ministry with respect to such Calendar Year a Production sharing statement containing the following information for the purposes of Article 7 of the Contract:
(a) the value of all sales of Hydrocarbons made by the Contractor as from the Effective Date of the Contract up to the end of the previous Calendar Year;
(b) the value of all sales of Hydrocarbons made by the Contractor during the Calendar Year in question;
(c) the total of (a) and (b) above at the end of the Calendar Year in question;
(d) the accumulated Petroleum Operations Costs as from the Effective Date of the Contract up to the end of the previous Calendar Year;
(e) the Petroleum Operations Costs for the Calendar Year in question;
(f) the total of (d) and (e) above at the end of the Calendar Year in question;
(g) quantity and value of the Contractor's share in Hydrocarbons; and
(h) quantity of State’s share of Hydrocarbons and its value if sold by the Contractor.
PRODUCTION SHARING STATEMENT. The Contractor shall prepare, with respect to each Quarter, a Production Sharing Statement for each Development Area containing the following information: