Common use of Recovery of Costs and Expenses and Production Sharing Clause in Contracts

Recovery of Costs and Expenses and Production Sharing. (a) Where a company has more than one exploration licence within a Contract Area (prior to any relinquishments) there shall be no “ring fencing” of Exploration or Development Licences in such Contract Area. Provided that, in respect of Development Area falling within the Contract Area (prior to any relinquishments), Contract Expenses in other Licence Area or Block(s) within the Contract Area (prior to any relinquishments) may only be recoverable from petroleum revenues from such Development area to the extent that were incurred prior to commencement of Petroleum production from such Development Area. (b) Royalty as provided for in Article 14(c) shall be charged first on total production from the Contract Area. The Royalty shall be reckoned at the well head before recovery of costs. (c) Subject to sub-article (b) and (e) of this Article and sub-article (a) of Article 13, all Contract Expenses incurred by the Contractor and, where Joint Operations have been established by TPDC shall be recovered from a volume of Crude Oil“ and/or “Natural Gas” or “Gas” (hereinafter referred to as “Cost Oil” and/or “Cost Gas”) produced and saved from the Contract Area and limited in any Calendar Year to an amount not exceeding fifty per cent (50%) of remaining total Crude Oil /Natural Gas production from the Contract Area in the onshore/shelf areas (d) Contract Expenses which, pursuant to the provision of Annex D, may be recovered from Cost Oil and/or Cost Gas are hereinafter referred to as “Recoverable Contract Expenses”. Such expenses may be recovered as from the date they have been incurred. To the extent that, in any Calendar Year, the Recoverable Contract Expenses exceed the Cost Oil and/or Cost Gas available under Article 11 (c), the un-recovered excess shall be carried forward for recovery in the next succeeding Calendar Year and, to the extent not then recovered, in the subsequent Year or Years. (e) Where, additionally, Joint Operations have been established: (i) No Contract Expenses incurred by TPDC shall be recovered from the Cost Oil and/or Cost Gas unless there is production from a Development Area in respect of which there are Joint Operations; (ii) The available Cost Oil and/or Cost Gas shall be applied first to recover Operating Expenses, and the Contractor and TPDC shall be entitled to recover such Expenses in proportion to their individual cumulative un-recovered Operating Expenses. After recovery of Operating Expenses any excess Cost Oil and/or Cost Gas available for distribution shall be applied to recover Exploration Expenses. After recovery of Operating Expenses and Exploration Expenses any excess Cost Oil and/or Cost Gas available for distribution shall be applied, and the Contractor and TPDC shall be entitled to recover such expenses in proportion to their individual cumulative un- recovered Development Expenses. Any un-recovered Contract Expenses shall be recovered out of the Cost Oil and/or Cost Gas available in the next succeeding Calendar Year or Years in the same manner as set out herein. (f) Subject to the limitations set out in sub-article (c) of this Article, the quantity of Cost Oil and/or Cost Gas which the Contractor and, if Joint Operations have been established, TPDC actually require and shall be entitled to in any Calendar Year will be established on the basis of the average fair market price per barrel determined in accordance with Article 12 herein. (g) (i) (a) Profit Oil: For the purpose of sharing profit oil/gas between the Contractor and TPDC, the balance of Crude Oil available in any Year after Recoverable Contract Expenses have been recovered to the extent and in the manner aforesaid (hereinafter referred to as “Profit Oil /Gas”), total Crude Oil/Natural Gas production from the Contract Area shall be divided based on the following tranches: 0- 12,499 12,500- 24,999 25,000- 49,999 50,000- 99,999 100,000 and above (b) Profit Gas: For the purpose of sharing profit gas between the Contractor and TPDC, the balance of Natural Gas available in any Year after Recoverable Contract Expenses have been recovered to the extent and in the manner aforesaid (hereinafter referred to as “Profit Gas”), total Natural Gas production from the Contract Area shall be divided based on the following tranches: 0 - 19.99 20 - 39.99 40 - 59.99 60 - 79.99 80 99.99 100 and above

Appears in 1 contract

Samples: Production Sharing Agreement

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Recovery of Costs and Expenses and Production Sharing. (a) Where a company has more than one exploration licence within a Contract Area (prior to any relinquishments) there shall be no “ring fencing” of Exploration or Development Licences in such Contract Area. Provided that, in respect of Development Area falling within the Contract Area (prior to any relinquishments), Contract Expenses in other Licence Area or Block(s) within the Contract Area (prior to any relinquishments) may only be recoverable from petroleum revenues from such Development area to the extent that were incurred prior to commencement of Petroleum production from such Development Area. (b) Royalty as provided for in Article 14(c) shall be charged first on total production from the Contract Area. The Royalty shall be reckoned at the well head before recovery of costs. (c) Subject to sub-article (b) and (ec) of this Article and sub-article (a) of Article 13, all Contract Expenses incurred by the Contractor and, where Joint Operations have been established established, by TPDC shall be recovered from a volume of Crude Oil“ and/or “Natural Gas” or “Gas” Oil (hereinafter referred to as “Cost Oil” and/or “Cost Gas”) produced and saved from the Contract Area and limited in any Calendar Year to an amount not exceeding fifty per cent percent (50%) and seventy percent (70%) of remaining total Crude Oil /Natural Gas production from the Contract Area in the onshore/shelf areas, and in the deep water respectively. (db) Contract Expenses which, which pursuant to the provision of Annex D, may be recovered from Cost Oil and/or Cost Gas are hereinafter referred to as “Recoverable Contract Expenses”. Such expenses may be recovered as from the date they have been incurred. To the extent that, that in any Calendar Year, Year the Recoverable Contract Expenses exceed the Cost Oil and/or Cost Gas available under Article 11 (ca), the un-recovered unrecovered excess shall be carried forward for recovery in the next succeeding Calendar Year and, to the extent not then recovered, recovered in the subsequent Year or Years. (ec) Where, additionally, Joint Operations have been established: (i) No Contract Expenses incurred by TPDC shall be recovered from the Cost Oil and/or Cost Gas unless there is production from a Development Area in respect of which there are Joint Operations; (ii) The available Cost Oil and/or Cost Gas shall be applied first to recover Operating Expenses, and the Contractor and TPDC shall be entitled to recover such Expenses in proportion to their individual cumulative un-recovered unrecovered Operating Expenses. After recovery of Operating Expenses any excess Cost Oil and/or Cost Gas available for distribution shall be applied to recover Exploration Expenses. After recovery of Operating Expenses and Exploration Expenses any excess Cost Oil and/or Cost Gas available for distribution shall be appliedapplied to recover Development Expenses, and the Contractor and TPDC shall be entitled to recover such expenses in proportion to their individual cumulative un- recovered unrecovered Development Expenses. Any un-recovered unrecovered Contract Expenses shall be recovered out of the Cost Oil and/or Cost Gas available in the next succeeding Calendar Year or Years in the same manner as set out herein. (fd) Subject to the limitations set out in sub-article (ca) of this Article, the quantity of Cost Oil and/or Cost Gas which the Contractor and, if Joint Operations have been established, TPDC actually require and shall be entitled to in any Calendar Year will be established on the basis of the average fair market price per barrel determined in accordance with Article 12 herein. (gi) (i) (a) Profit Oil: For the purpose of sharing profit oil/gas oil between the Contractor and TPDC, the balance of Crude Oil available in any Year after Recoverable Contract Expenses have been recovered to the extent and in the manner aforesaid (hereinafter referred to as “Profit Oil /Gas”), total Crude Oil/Natural Gas production from the Contract Area shall be divided based on one of the following tranches: 0- 12,499 12,500- 24,999 25,000- 49,999 50,000- 99,999 100,000 and abovecontractually agreed options: (b1) Profit Gas: For Increments of daily total production rates (barrels of oil per day, BOPD) in the purpose Contract Area in the onshore and shelf areas (BOPD) Increments of sharing profit gas between daily total production rates in the Contractor Contract Area in the Deep Water (BOPD) (ii) The increments of production referred to in this Article 11 and TPDC, also in Article 9 herein shall be specified in terms of average daily production rates. The average daily production rates shall be determined for each Calendar Quarter and shall be calculated by dividing the balance total quantity of Natural Gas available Crude Oil produced and saved from the Contract Area during any Quarter by the total number of days during which Crude Oil was produced in such Quarter. (iii) The quantity of Cost Oil required to satisfy Recoverable Contract Expenses in any Year after Recoverable Contract Expenses have been recovered shall be allocated to each of the extent and applicable increments of production in the manner aforesaid (hereinafter referred same proportion as the total production in each increment of production bears to as “Profit Gas”), total Natural Gas production from the Contract Area Area. (f) If there are no Joint Operations, after allocation of Recoverable Contract Expenses in accordance with sub-article (e) (iii) of this Article , the resulting Profit Oil in each increment of production shall be divided based on shared as follows: OPTION (1.1) Increments of daily total Production rates in the following tranches: 0 - 19.99 20 - 39.99 40 - 59.99 60 - 79.99 80 99.99 100 Contract Area onshore and aboveshelf areas TPDC Share of Profit Oil Contractor Share of Profit Oil

Appears in 1 contract

Samples: Production Sharing Agreement

Recovery of Costs and Expenses and Production Sharing. (a) Where a company has more than one exploration licence within a Contract Area (prior to any relinquishments) there There shall be no “ring fencing:” of Exploration or Development Licences exploration blocks in such Contract AreaTanzania. Provided that, The petroleum exploration expenses in respect of Development Area falling within the Contract Area (prior to any relinquishments), Contract Expenses in other Licence Area or Block(s) within the Contract Area (prior to any relinquishments) may only one licence area shall be recoverable from petroleum revenues from such Development area carried over to the extent that were incurred prior to commencement next licence area. The resulting cumulative expenses shall be recovered from the “Cost Oil” from the subsequent licence area in case of Petroleum production from such Development Areadiscovery. (b) Royalty as provided for in Article 14(c) shall be charged first on total production from the Contract Area. The Royalty shall be reckoned at the well head before recovery of costs. (c) Subject to sub-article (bc) and (e) of this Article below and sub-article (a) of Article 13, all 11,all Contract Expenses incurred by the Contractor Company and, where Joint Operations have been established established, by TPDC T.P.D.C. shall be recovered from a volume of Crude Oil“ and/or “Natural Gas” or “Gas” Oil (hereinafter referred to as “Cost Oil” and/or “Cost Gas”) produced and saved from the Contract Area and limited in any Calendar Year to an amount not exceeding fifty per cent exceeding: (i) Sixty percent (60%) of total Crude Oil production from the Contract Area when the total cumulative production in the Contract Area after the Effective Date is equal to or less than 25 million barrels of Crude Oil, and (ii) Fifty percent (50%) of remaining the next 25 million barrels of total Crude Oil /Natural Gas production from the Contract Area (i.e., from when the total cumulative production in the onshore/shelf areasContract Area after the Effective Date exceeds 25 million barrels but is equals to or less than 50 million barrels), and (diii) Forty percent (40%) of all Crude Oil produced and saved from the Contract Area when the total cumulative production in the Contract Area after the Effective Date Exceeds 50 million barrels; provided that where the applicable percentage changes in the course of any Calendar Year the applicable percentage shall be applied pro rata to the portion of annual Crude Oil production occurring in each band of cumulative production. (c) Contract Expenses which, which pursuant to the provision of Annex D, may be recovered from Cost Oil and/or Cost Gas are hereinafter referred to as “Recoverable Contract Expenses”. Such expenses may be recovered as from the date they have been incurred. To the extent that, that in any Calendar Year, Year the Recoverable Contract Expenses exceed the Cost Oil and/or Cost Gas available under Article 11 9 (cb), the un-recovered unrecovered excess shall be carried forward for recovery in the next succeeding Calendar Year and, to the extent not then recovered, recovered in the subsequent subsquent Year or Years. (ed) Where, additionally, Joint Operations have been established: (i) No Contract Expenses incurred by TPDC T.P.D.C. shall be recovered from the Cost Oil and/or Cost Gas unless there is production from a Development Area in respect of which there are Joint Operations; (ii) The available Cost Oil and/or Cost Gas shall be applied first to recover Operating Expenses, and the Contractor Company and TPDC T.P.D.C. shall be entitled to recover such Expenses in proportion to their individual cumulative un-recovered Operating unrecovered Opening Expenses. After recovery of Operating Expenses any excess Cost Oil and/or Cost Gas available for distribution shall be applied to recover Exploration Expenses. After recovery of Operating Expenses and Exploration Expenses any excess Cost Oil and/or Cost Gas available for distribution shall be appliedapplied to recover Development Expenses, and the Contractor Company and TPDC T.P.D.C. shall be entitled to recover such expenses in proportion to their individual cumulative un- recovered unrecovered Development Expenses. Any un-recovered unrecovered Contract Expenses shall be recovered out of the Cost Oil and/or Cost Gas available in the next succeeding Calendar Year or Years in the same manner as set out herein. (fe) Subject to the limitations set out in sub-article (cb) of this Articleabove, the quantity of Cost Oil and/or Cost Gas which the Contractor Company and, if Joint Operations have been established, TPDC T.P.D.C. actually require and shall be entitled to in any Calendar Year will be established on the basis of the average fair market price per barrel determined in accordance with Article 12 10 herein. (gi) (i) (a) Profit Oil: For the purpose of sharing profit oil/gas incrementally between the Contractor and TPDC, parties the balance of Crude Oil available in any Year after Recoverable Contract Expenses have been recovered to the extent and in the manner aforesaid (hereinafter referred to as (“Profit Oil /GasOil”), total Crude Oil/Natural Gas Oil production from the Contract Area shall be divided based on into the following tranchesincrements: 0- 12,499 12,500- 24,999 25,000- 49,999 50,000- 99,999 0 - 12,500 BOPD 12,001 - 25,000 BOPD 25,001 - 50,000 BOPD 50,001 - 100,000 and aboveBOPD Above 100,000 BOPD (bii) Profit Gas: For The increments of production referred to this Article 9 and also in Article 7 herein shall be specified in terms of average daily production rates (barrels of oil per day, BOPD). The average daily production rates shall be determined for each Calendar Quarter and shall be calculated by dividing the purpose total quantity of sharing profit gas between Crude Oil produced and saved from the Contractor and TPDC, Contract Area during any Quarter by the balance total number of Natural Gas available days during which Crude Oil was produced in such Quarter. (iii) The quantity of Cost Oil required to satisfy Recoverable Contract Expenses in any Year after Recoverable Contract Expenses have been recovered shall be allocated to each of the extent and applicable increments of production in the manner aforesaid (hereinafter referred same proportion as the total production in each increment of production bears to as “Profit Gas”), total Natural Gas production from the Contract Area Area. (g) If there are no Joint Operations, after allocation of Recoverable Contract Expenses inaccordance with sub-article (f)(iii) above, the resulting Profit Oil in each increment of production shall be divided based on the following tranchesshared as follows: 0 - 19.99 20 12,500 BOPD 50% 50% 12,501 - 39.99 40 25,000 BOPD 55% 45% 25,001 - 59.99 60 50,000 BOPD 60% 40% 50,001 - 79.99 80 99.99 100 and above100,000 BOPD 65% 35% Above 100,000 BOPD 70% 30% (h) If there are Joint Operations in all Development Areas, T.P.D.C.’s share of Profit Oil indicated in sub-article (g) above relative to each increment of production shall be increased by the number of percentage points obtained by multiplying the percentage of the Specified Proportion determined in accordance with article 7(b)

Appears in 1 contract

Samples: Production Sharing Agreement

Recovery of Costs and Expenses and Production Sharing. (a) Where a company has more than one exploration licence within a Contract Area (prior to any relinquishments) there shall be no “ring fencing” of Exploration or Development Licences in such Contract Area. Provided that, in respect of Development Area falling within the Contract Area (prior to any relinquishments), Contract Expenses in other Licence Area or Block(s) within the Contract Area (prior to any relinquishments) may only be recoverable from petroleum revenues from such Development area to the extent that were incurred prior to commencement of Petroleum production from such Development Area. (b) Royalty as provided for in Article 14(c) shall be charged first on total production from the Contract Area. The Royalty shall be reckoned at the well head before recovery of costs. (c) Subject to sub-article (bd) and (eg) of this Article and sub-article (a) of Article 1315, all Recoverable Contract Expenses incurred by the Contractor and, where Joint Operations have been established established, by both TPDC and the Contractor shall be recovered by freely taking and disposing from a volume of Crude Oil“ Oil and/or Natural Gas” or “Gas” Gas produced and saved from the Contract Area and not used in Petroleum Operations (hereinafter referred to as “Cost Oil” and/or “Cost Gas”) produced and saved from the ). Recoverable Contract Area and Expenses shall be limited in any Calendar Year to an amount not exceeding fifty per cent (50%) in case of remaining onshore/shelf areas and offshore areas and Lake Tanganyika of the total Crude Oil /Natural or Natural Gas production from the Contract Area in net of Royalty. For the onshore/purposes of this Article onshore areas include shelf areasup to water depths of 500 meters and offshore areas include water depths beyond 500 meters. (db) Recoverable Contract Expenses which, pursuant to the provision of Annex D, may be recovered from Cost Oil and/or Cost Gas are hereinafter referred to as “Recoverable Contract Expenses”. Such expenses may be recovered as from the date they have been prudently incurred. To the extent that, in any Calendar Year, the Recoverable Contract Expenses exceed the Cost Oil and/or Cost Gas available in each Calendar Year under Article 11 12 (ca), the un-recovered unrecovered excess shall be carried forward for recovery in the next succeeding Calendar Year and, to the extent not then recovered, in the subsequent Year or YearsYears until fully recovered or until the termination of the Agreement, where such termination occurs earlier, whatever the reason thereof. No unrecovered cost can be recovered by the Contractor or, as the case may be, TPDC, after such termination. (c) There shall be ring fencing based on Exploration Licence or Development Licence. (d) Where a company holds Exploration Licence or more than one Development Licence within a Contract Area (prior to any relinquishments) recoverable Contract Expenses in Licence Areas or Block(s) within the Contract Area (prior to any relinquishments) may only be recoverable from petroleum revenues from such Development Area to the extent that were incurred prior to commencement of Petroleum production from such Development Area. (e) Where, additionally, Joint Operations Royalty as provided for in Article 16(c) shall have been established:a first charge on gross production from the Contract Area. The Royalty shall be reckoned at the Delivery Point before recovery of costs. (i) No Contract Expenses incurred by TPDC shall be recovered from the Cost Oil and/or Cost Gas unless there is production from a Development Area in respect of which there are Joint Operations; (ii) The available Cost Oil and/or Cost Gas shall be applied first to recover Operating Expenses, and the Contractor and TPDC shall be entitled to recover such Expenses in proportion to their individual cumulative un-recovered unrecovered Operating Expenses. . (ii) After recovery of Operating Expenses any excess Cost Oil and/or Cost Gas available for distribution shall be applied to recover Exploration Expenses. . (iii) After recovery of Operating Expenses and Exploration Expenses any excess Cost Oil and/or Cost Gas available for distribution shall be applied, and the Contractor and TPDC shall be entitled to recover such expenses in proportion to their individual cumulative un- recovered unrecovered Development Expenses. . (iv) Any un-recovered Recoverable Contract Expenses shall be recovered out of the Cost Oil and/or Cost Gas available in the next succeeding Calendar Year or Years in the same manner as set out hereinherein in sub-article (b) above. (f) Subject to the limitations set out in sub-article (ca) and (b) of this Article, the quantity of Cost Oil and/or Cost Gas which the Contractor and, if Joint Operations have been established, TPDC actually require and acquire shall be entitled to in any Calendar Year will be established on the basis of the average fair market price per barrel determined in accordance with Article 12 13 herein. (g) (i) (a) Profit Oil: For the purpose of sharing profit oil/gas between the Contractor and TPDC, the balance of Crude Oil available in any Year after Recoverable Contract Expenses have been recovered to the extent and in the manner aforesaid (hereinafter referred to as “Profit Oil /Gas”), total Crude Oil/Natural Gas production from the Contract Area shall be divided based on the following tranches: 0- 12,499 12,500- 24,999 25,000- 49,999 50,000- 99,999 100,000 and above (b) Profit Gas: For the purpose of sharing profit gas between the Contractor and TPDC, the balance of Natural Gas available in any Year after Recoverable Contract Expenses have been recovered to the extent and in the manner aforesaid (hereinafter referred to as “Profit Gas”), total Natural Gas production from the Contract Area shall be divided based on the following tranches: 0 - 19.99 20 - 39.99 40 - 59.99 60 - 79.99 80 99.99 100 and above

Appears in 1 contract

Samples: Production Sharing Agreement

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Recovery of Costs and Expenses and Production Sharing. (a) Where a company has more than one exploration licence within a Contract Area Subject to paragraphs (prior to any relinquishments) there shall be no “ring fencing” of Exploration or Development Licences in such Contract Area. Provided that, in respect of Development Area falling within the Contract Area (prior to any relinquishmentsb), Contract Expenses in other Licence Area or Block(s) within the Contract Area (prior to any relinquishments) may only be recoverable from petroleum revenues from such Development area to the extent that were incurred prior to commencement of Petroleum production from such Development Area. (b) Royalty as provided for in Article 14(c) shall be charged first on total production from the Contract Area. The Royalty shall be reckoned at the well head before recovery of costs. (c) Subject to sub-article ), (be) and (eh) of this Article and sub-article (a) of Article 1315, all recoverable Contract Expenses incurred by the Contractor and, where Joint Operations have been established established, by TPDC both ZPDC and the Contractor, shall be recovered by freely taking and disposing from a volume of Crude Oil“ and/or “Oil or Natural Gas” or “Gas” Gas produced and saved from the Contract Area and not used in Petroleum Operations (hereinafter referred to as “Cost Oil” and/or or “Cost Gas”). (b) produced and saved from the Recoverable Contract Area and Expenses shall be limited in any Calendar Year to an amount not exceeding fifty per cent (50%) in case of remaining onshore areas and not exceeding sixty percent (60%) in case of offshore areas of the total Crude Oil /Natural or Natural Gas production production, net of Royalty, from the Contract Area in the onshore/shelf areasArea. (dc) Recoverable Contract Expenses which, pursuant to the provision of Annex D, may be recovered from Cost Oil and/or Cost Gas are hereinafter referred to as “Recoverable Contract Expenses”. Such expenses may be recovered as from the date they have been prudently incurred. To the extent that, in any Calendar Year, the Recoverable Contract Expenses exceed the Cost Oil and/or Cost Gas available in each Calendar Year under Article 11 Paragraph (cb), the un-recovered unrecovered excess shall be carried forward for recovery in the next succeeding Calendar Year and, to the extent not then recovered, in the subsequent Year or YearsYears until fully recovered or until the termination of the Agreement, where such termination occurs earlier, whatever the reason thereof; and no unrecovered cost can be recovered by the Contractor or, as the case may be, ZPDC, after such termination. (d) Ring fencing of Recoverable Contract Expenses shall be carried out in accordance with Section 105 of the Act. (e) WhereWhere a company holds an Exploration License or more than one Development License within a Contract Area, additionallyrecoverable Contract Expenses in License Areas or Block(s) within the Contract Area, Joint Operations may only be recoverable from petroleum revenues from such Development Area to the extent that these were incurred prior to commencement of Petroleum production from such Development Area. (f) Royalty as provided for in Article 16(c) shall have been establisheda first charge on gross production from the Contract Area. The Royalty shall be calculated at the Delivery Point before recovery of costs. After deducting Royalty from the gross production, the remaining volume of crude oil or natural gas shall be distributed as follows: (i) No Contract Expenses incurred by TPDC shall be recovered from the Cost Oil and/or Cost Gas unless there is production from a Development Area in respect of which there are Joint Operations; (ii) The available Cost Oil and/or Cost Gas shall be applied first to recover Operating Expenses, and the Contractor and TPDC ZPDC shall be entitled to recover such Expenses in proportion to their individual cumulative un-recovered unrecovered Operating Expenses. . (ii) After recovery of Operating Expenses any excess Cost Oil and/or Cost Gas available for distribution shall be applied to recover Exploration Expenses. . (iii) After recovery of Operating Expenses and Exploration Expenses any excess Cost Oil and/or or Cost Gas available for distribution shall be applied, and the Contractor and TPDC ZPDC shall be entitled to recover such expenses in proportion to their individual cumulative un- recovered unrecovered Development Expenses. . (iv) Any un-recovered Recoverable Contract Expenses shall be recovered out of the Cost Oil and/or Cost or Gas available in the next succeeding Calendar Year year or Years years in the same manner as set out hereinherein in paragraph (b) above. (fg) Subject to the limitations set out in sub-article paragraphs (a) (b) and (c) of this Article, the quantity of Cost Oil and/or Cost Gas which the Contractor and, if Joint Operations have been established, TPDC actually require and ZPDC, shall be entitled to in any Calendar Year will be established on the basis of the average fair market price per barrel determined in accordance with Article 12 13 herein. (g) (i) (a) Profit Oil: For the purpose of sharing profit oil/gas between the Contractor and TPDC, the balance of Crude Oil available in any Year after Recoverable Contract Expenses have been recovered to the extent and in the manner aforesaid (hereinafter referred to as “Profit Oil /Gas”), total Crude Oil/Natural Gas production from the Contract Area shall be divided based on the following tranches: 0- 12,499 12,500- 24,999 25,000- 49,999 50,000- 99,999 100,000 and above (b) Profit Gas: For the purpose of sharing profit gas between the Contractor and TPDC, the balance of Natural Gas available in any Year after Recoverable Contract Expenses have been recovered to the extent and in the manner aforesaid (hereinafter referred to as “Profit Gas”), total Natural Gas production from the Contract Area shall be divided based on the following tranches: 0 - 19.99 20 - 39.99 40 - 59.99 60 - 79.99 80 99.99 100 and above

Appears in 1 contract

Samples: Production Sharing Agreement

Recovery of Costs and Expenses and Production Sharing. (a) Where a company has more than one exploration licence within a Contract Area (prior to any relinquishments) there shall be no “ring fencing” of Exploration or Development Licences in such Contract Area. Provided that, in respect of Development Area falling within the Contract Area (prior to any relinquishments), Contract Expenses in other Licence Area or Block(s) within the Contract Area (prior to any relinquishments) may only be recoverable from petroleum revenues from such Development area to the extent that were incurred prior to commencement of Petroleum production from such Development Area. (b) Royalty as provided for in Article 14(c) shall be charged first on total production from the Contract Area. The Royalty shall be reckoned at the well head before recovery of costs. (c) Subject to sub-article (b) and (ec) of this Article and sub-article (a) of Article 13, all Contract Expenses incurred by the Contractor and, where Joint Operations have been established established, by TPDC shall be recovered from a volume of Crude Oil“ and/or “Natural Gas” or “Gas” Oil (hereinafter referred to as “Cost Oil” and/or “Cost Gas”) produced and saved from the Contract Area and limited in any Calendar Year to an amount not exceeding fifty per cent percent (50%) and seventy percent (70%) of remaining total Crude Oil /Natural Gas production from the Contract Area in the onshore/shelf areas, and in the deep water respectively. (db) Contract Expenses which, which pursuant to the provision of Annex D, may be recovered from Cost Oil and/or Cost Gas are hereinafter referred to as “Recoverable Contract Expenses”. Such expenses may be recovered as from the date they have been incurred. To the extent that, that in any Calendar Year, Year the Recoverable Contract Expenses exceed the Cost Oil and/or Cost Gas available under Article 11 (ca), the un-recovered unrecovered excess shall be carried forward for recovery in the next succeeding Calendar Year and, to the extent not then recovered, recovered in the subsequent Year or Years. (ec) Where, additionally, Joint Operations have been established: (i) No Contract Expenses incurred by TPDC shall be recovered from the Cost Oil and/or Cost Gas unless there is production from a Development Area in respect of which there are Joint Operations; (ii) The available Cost Oil and/or Cost Gas shall be applied first to recover Operating Expenses, and the Contractor and TPDC shall be entitled to recover such Expenses in proportion to their individual cumulative un-recovered unrecovered Operating Expenses. After recovery of Operating Expenses any excess Cost Oil and/or Cost Gas available for distribution shall be applied to recover Exploration Expenses. After recovery of Operating Expenses and Exploration Expenses any excess Cost Oil and/or Cost Gas available for distribution shall be appliedapplied to recover Development Expenses, and the Contractor and TPDC shall be entitled to recover such expenses in proportion to their individual cumulative un- recovered unrecovered Development Expenses. Any un-recovered unrecovered Contract Expenses shall be recovered out of the Cost Oil and/or Cost Gas available in the next succeeding Calendar Year or Years in the same manner as set out herein. (fd) Subject to the limitations set out in sub-article (ca) of this Article, the quantity of Cost Oil and/or Cost Gas which the Contractor and, if Joint Operations have been established, TPDC actually require and shall be entitled to in any Calendar Year will be established on the basis of the average fair market price per barrel determined in accordance with Article 12 herein. (gi) (i) (a) Profit Oil: For the purpose of sharing profit oil/gas oil between the Contractor and TPDC, the balance of Crude Oil available in any Year after shall be divided based on one of the following contractually agreed options: (1) Increments of daily total production rates (barrels of oil per day, BOPD) in the Contract Area in the onshore and shelf areas (BOPD) Increments of daily total production rates in the Contract Area in the Deep Water (BOPD) (ii) The increments of production referred to in this Article 11 and also in Article 9 herein shall be specified in terms of average daily production rates. The average daily production rates shall be determined for each Calendar Quarter and shall be calculated by dividing the total quantity of Crude Oil produced and saved from the Contract Area during any Quarter by the total number of days during which Crude Oil was produced in such Quarter. (iii) The quantity of Cost Oil required to satisfy Recoverable Contract Expenses have been recovered in any Year shall be allocated to each of the extent and applicable increments of production in the manner aforesaid same proportion as the total production in each increment of production bears to total production from the Contract Area. (f) If there are no Joint Operations, after allocation of Recoverable Contract Expenses in accordance with sub-article (e) (iii) of this Article , the resulting Profit Oil in each increment of production shall be shared as follows: .1) Increments of daily total Production rates in the Contract Area onshore and shelf areas TPDC Share of Profit Oil .2) Increments of daily total Production rates in the Contract Area in the deep water (BOPD) TPDC Share of Profit Oil (g) If there are Joint Operations in all Development Areas, TPDC’s share of Profit Oil indicated in sub-article (f) of this Article relative to each increment of production shall be increased by the number of percentage points obtained by multiplying the percentage of the Specified Proportion determined in accordance with Article 9 (b) (ii) by the Contractor’s share of Profit Oil indicated in sub-article (f) of this Article relative to such increment of Profit Oil, and the Contractor’s share shall be reduced accordingly. However, where TPDC has elected pursuant to Article 9 (b) (i) not to participate in Joint Operations in all Development Areas, the increase in TPDC’s share of Profit Oil shall be the result of the above calculation multiplied by the ratio of total production from Joint Operations total production in the Contract Area during each Year. OPTION (2) (h) The R Factor The R Factor to be used for the purposes of sub-article (i) of this Article shall mean and be calculated as the ratio of Contractor’s cumulative revenues from the Effective Date until the end of the preceding month to Contractor’s cumulative expenditures from the Effective Date until the end of the preceding month, all as relates to Petroleum Operations in the Contract Area. (i) The cumulative revenues shall be the aggregate value determined pursuant to this Article 11 of the Contractor’s share of Cost Oil and Profit Oil. (ii) The cumulative expenditures shall be the aggregate amount of the expenditure previously incurred by the Contractor as Contract Expenses. (i) The balance of Crude Oil available in any period after deducting Recoverable Contract Expenses (hereinafter referred to as “Profit Oil /GasOil), total Crude Oil/Natural Gas production from the Contract Area ) shall be divided shared between the parties in accordance with the table below: R Factor TPDC’s Share CONTRACTOR’s Share 1.00 ≤ R < 1.25 1.25 ≤ R < 1.50 1. 50 ≤ R < 2.00 2.00 ≤ R < 2.50 (j) With respect to this Article 11, Cost Oil and Profit Oil calculations shall be done for each Calendar Quarter and the Crude Oil provisionally shared accordingly. To the extent that actual quantities, expenses and prices are not known, provisional estimates of such data based on the following tranches: 0- 12,499 12,500- 24,999 25,000- 49,999 50,000- 99,999 100,000 approved Work Programme, budget and above (b) any other relevant documentation or information shall be used. Within 60 days of the end of each Calendar Year a final calculation of Cost Oil and Profit Gas: For Oil based on actual Crude Oil quantities, prices and recoverable costs and expenses in respect of that Calendar Year shall be prepared and any necessary adjustments to the purpose of Crude Oil sharing profit gas shall be agreed upon between the Contractor and TPDCTPDC and made as soon as is practicable. (k) Subject to Article 16 (d), the balance Contractor will be free to export any Petroleum received by the Contractor pursuant to Article 11 and Article 13 of Natural Gas available in any Year after Recoverable Contract Expenses have been recovered this Agreement and to retain the extent and in proceeds of the manner aforesaid (hereinafter referred to as “Profit Gas”), total Natural Gas production from the Contract Area shall be divided based on the following tranches: 0 - 19.99 20 - 39.99 40 - 59.99 60 - 79.99 80 99.99 100 and abovesale of such Petroleum outside Tanzania.

Appears in 1 contract

Samples: Production Sharing Agreement

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