RECOVERY OF OPERATING COSTS AND SHARING OF PETROLEUM PRODUCTION. 10.1 The allocation of Available Crude Oil shall be calculated on a Contract Area basis for Royalty Oil, Cost Oil and Profit Oil. This allocation of Available Crude Oil shall be in accordance with the Accounting Procedures, the Allocation and Lifting Procedures and this Clause 10 as follows: (a) Royalty Oil shall be allocated to the State from the first day of Production, based on the daily total of Available Crude Oil from the Contract Area, set at a rate of 2%; (b) Cost Oil shall be allocated to the Contractor in such quantum as will generate an amount of Proceeds sufficient for recovery of Operating Costs in the Contract Area. All costs will be recovered in United States dollars through Cost Oil allocation; (c) Cost Oil shall be not more than eighty percent (80%) of Available Crude Oil in the Contract Area after deduction of Royalty Oil in any accounting period; (d) Profit Oil, being the balance of Available Crude Oil after deducting Royalty Oil and Cost Oil shall be allocated to each Party based on the pre-tax, nominal rate of return calculated on a quarterly basis for the Contract Area in accordance with the following sliding scale: 10.2 Beginning at the date of Commercial Discovery, Contractor’s rate of return shall be determined at the end of each Quarter on the basis of the accumulated compounded net cash flow for the Contract Area, using the following procedure: (a) The Contractor’s net cash flow for the Contract Area for each Quarter is: (i) The sum of Contractor’s Cost Oil and share of Contract Area Profit Oil regarding the Petroleum actually lifted in that Quarter at the Realizable Price;
Appears in 2 contracts
Samples: Production Sharing Contract, Production Sharing Contract (Kosmos Energy Ltd.)
RECOVERY OF OPERATING COSTS AND SHARING OF PETROLEUM PRODUCTION. 10.1 The allocation of Available Crude Oil shall be calculated on a Contract Area basis for Royalty Oil, Cost Oil and Profit Oil. This allocation of Available Crude Oil shall be in accordance with the Accounting ProceduresProcedure, the Allocation and Lifting Procedures Procedure and this Clause 10 as follows:
(a) Royalty Oil shall be allocated to the State from the first day of Production, based on the daily total of Available Crude Oil from the a Contract Area, set at a rate of two percent (2%);
(b) Cost Oil shall be allocated to the Contractor in such quantum as will generate an amount of Proceeds sufficient for recovery of Operating Costs in the each Contract Area. All costs will be recovered in United States dollars through Cost Oil allocation;
(c) Cost Oil shall be not more than eighty percent (80%) of Available Crude Oil in the each Contract Area after less deduction of Royalty Oil in any accounting period;
(d) Profit Oil, being the balance of Available Crude Oil after deducting Royalty Oil and Cost Oil shall be allocated to each Party based on the pre-tax, nominal rate of return calculated on a quarterly basis for the Contract Area in accordance with the following sliding scale:: Contractor’s Rate of Return for Contract Area (%per annum) Government Share of Profit Oil Contractor Share of Profit Oil
10.2 Beginning at the date of Commercial Discovery, Contractor’s rate of return shall be determined at the end of each Quarter on the basis of the accumulated compounded net cash flow for the each Contract Area, using the following procedure:
(a) The Contractor’s net cash flow for the a Contract Area for each Quarter is:
(i) The sum of the Contractor’s Cost Oil and share of Contract Area Profit Oil regarding the Petroleum actually lifted in that Quarter at the Realizable Price;
Appears in 1 contract
RECOVERY OF OPERATING COSTS AND SHARING OF PETROLEUM PRODUCTION. 10.1 The allocation of Available Crude Oil shall be calculated on a Contract Area basis for Royalty Oil, Cost Oil and Profit Oil. This allocation of Available Crude Oil shall be in accordance with the Accounting Procedures, the Allocation and Lifting Procedures and this Clause 10 10 as follows:
(a) Royalty Oil shall be allocated to the State from the first day of Production, based on the daily total of Available Crude Oil from the Contract Area, set at a rate of 2%;
(b) Cost Oil shall be allocated to the Contractor in such quantum as will generate an amount of Proceeds sufficient for recovery of Operating Costs in the Contract Area. All costs will be recovered in United States dollars through Cost Oil allocation;
(c) Cost Oil shall be not more than eighty percent (80%) of Available Crude Oil in the Contract Area after deduction of Royalty Oil in any accounting period;
(d) Profit Oil, being the balance of Available Crude Oil after deducting Royalty Oil and Cost Oil shall be allocated to each Party based on the pre-tax, nominal rate of return calculated on a quarterly basis for the Contract Area in accordance with the following sliding scale:
10.2 Beginning at the date of Commercial Discovery, Contractor’s rate of return shall be determined at the end of each Quarter on the basis of the accumulated compounded net cash flow for the Contract Area, using the following procedure:
(a) The Contractor’s net cash flow for the Contract Area for each Quarter is:
(i) The sum of Contractor’s Cost Oil and share of Contract Area Profit Oil regarding the Petroleum actually lifted in that Quarter at the Realizable Price;
Appears in 1 contract
RECOVERY OF OPERATING COSTS AND SHARING OF PETROLEUM PRODUCTION. 10.1 The allocation of Available Avaílable Crude Oil shall be calculated on a Contract Area basis for Royalty Oil, Cost Oil and Profit OilOi1. This allocation of Available Crude Oil shall be in accordance with the Accounting Procedures, the Allocation and Lifting Procedures and this Clause 10 as follows:
(a) Royalty Oil shall be allocated to the State from the first day of Production, based on the daily total of Available Crude Oil from the Contract Area, set at a rate of 2%;
(b) Cost Oil shall be allocated to the Contractor in such quantum as will generate an amount of Proceeds sufficient for recovery of Operating Costs in the Contract Area. All costs will be recovered in United States dollars through Cost Oil allocation;
(c) Cost Oil shall be not more than eighty percent (80%) of Available Crude Oil in the Contract Area after deduction of Royalty Oil in any accounting period;
(d) Profit Oil, being the balance of Available Crude Oil after deducting Royalty Oil and Cost Oil shall be allocated to each Party based on the pre-tax, nominal rate of return calculated on a quarterly basis for the Contract Area in accordance with the following sliding scale:: Contractor's Rate of Return for Contract Area (% Der annurn) <19% Governrnent Share of Profit OH 0% Contractor Share of Profit OH 100% >-19 %< 22% 10% 90% >-22%<26 % 20% 80% >-26%<29% 40% 60% >-29% 50% 50%
10.2 Beginning at the date of Commercial Discovery, Contractor’s 's rate of return shall be determined at the end of each Quarter on the basis of the accumulated compounded net cash flow for the Contract Area, using the following procedure:
(a) The Contractor’s 's net cash flow for the Contract Area for each Quarter is:
(i) The sum of Contractor’s Contractor 's Cost Oil and share of Contract Area Profit Oil regarding the Petroleum actually actual1y lifted in that Quarter at the Realizable Price;
Appears in 1 contract
Samples: Production Sharing Contract
RECOVERY OF OPERATING COSTS AND SHARING OF PETROLEUM PRODUCTION. 10.1 The allocation of Available Crude Oil shall be calculated on a Contract Area basis for Royalty Oil, Cost Oil and Profit Oil. This allocation of Available Crude Oil shall be in accordance with the Accounting ProceduresProcedure, the Allocation and Lifting Procedures Procedure and this Clause 10 as follows:
(a) Royalty Oil shall be allocated to the State from the first day of Production, based on the daily total of Available Crude Oil from the a Contract Area, set at a rate of 2%;
(b) Cost Oil shall be allocated to the Contractor in such quantum as will generate an amount of Proceeds sufficient for recovery of Operating Costs in the each Contract Area. All costs will be recovered in United States dollars through Cost Oil allocation;
(c) Cost Oil shall be not more than eighty percent (80%) % of Available Crude Oil in the each Contract Area after less deduction of Royalty Oil in any accounting period;
(d) Profit Oil, being the balance of Available Crude Oil after deducting Royalty Oil and Cost Oil shall be allocated to each Party based on the pre-tax, nominal rate of return calculated on a quarterly basis for the Contract Area in accordance with the following sliding scale:
10.2 Beginning at the date of Commercial Discovery, Contractor’s 's rate of return shall be determined at the end of each Quarter on the basis of the accumulated compounded net cash flow for the each Contract Area, using the following procedure:
(a) The Contractor’s 's net cash flow for the a Contract Area for each Quarter is:
(i) The sum of the Contractor’s 's Cost Oil and share of Contract Area Profit Oil regarding the Petroleum actually lifted in that Quarter at the Realizable Price;
(ii) Minus Operating Costs;
(b) For this computation, neither any expenditure incurred prior to the date of Commercial Discovery for a Contract Area nor any Exploration Expenditure shall be included in the computation of the Contractor's net cash flow.
(c) The Contractor's net cash flows for each Quarter are compounded and accumulated for a Contract Area from the date of the Commercial Discovery according to the following formula: ACNCF (Current Quarter) = (100% + DQ) x ACNCF (Previous Quarter) + NCF (Current Quarter) 100% where: ACNCF = accumulated compounded net cash flow NCF = net cash flow DQ = quarterly compound rate (in percent) The formula will be calculated using quarterly compound rates (in percent) of 3,78%, 4.45%, 5.31%, and 5.95%, which correspond to annual compound rates ("DA") of 16%, 19%, 23%, and 26%, respectively.
(d) The Contractor's rate of return in any given Quarter for a Contract Area shall be deemed to be between the largest DA which yields a positive or zero ACNCF and the smallest DA which causes the ACNCF to be negative.
(e) The sharing of Profit Oil from a Contract Area between the State and the Contractor in a given Quarter shall be in accordance with the scale in paragraph (a) above using the Contractor's deemed rate of return as per paragraph (c) in the immediately preceding Quarter.
(f) In a given Contract Area, it is possible for the Contractor's deemed rate of return to decline as a result of negative cash flow in a Quarter with the consequence that Contractor's share of Profit Oil from that Contract Area would increase in the subsequent Quarter.
(g) Pending finalization of accounts, Profit Oil from the Contract Area shall be shared on the basis of provisional estimates, if necessary, of a deemed rate of return as approved by the National Petroleum Agency. Adjustments shall be effected with the procedure subsequently to be adopted by the National Petroleum Agency.
10.3 The quantum of Available Crude Oil to be allocated to each Party under this Contract shall be determined at the Delivery Point.
10.4 Each Party shall lift and dispose of its allocation of Available Crude Oil in accordance with the Allocation and Lifting Procedures as provided in Schedule 3. In the event of any reconciliation, the records of the National Petroleum Agency shall be the official, final and binding records.
Appears in 1 contract
RECOVERY OF OPERATING COSTS AND SHARING OF PETROLEUM PRODUCTION. 10.1 The allocation of Available Crude Oil shall be calculated on a Contract Area basis for Royalty Oil, Cost Oil and Profit Oil. This allocation of Available Crude Oil shall be in accordance with the Accounting Procedures, the Allocation and Lifting Procedures and this Clause 10 as follows:
(a) Royalty Oil shall be allocated to the State from the first day of Production, based on the daily total of Available Crude Oil from the Contract Area, set at a rate of 2%;
(b) Cost Oil shall be allocated to the Contractor in such quantum as will generate an amount of Proceeds sufficient for recovery of Operating Costs in the Contract Area. All costs will be recovered in United States dollars through Cost Oil allocation;
(c) Cost Oil shall be not more than eighty percent (80%) of Available Crude Oil in the Contract Area after deduction of Royalty Oil in any accounting period;
(d) Profit Oil, being the balance of Available Crude Oil after deducting Royalty Oil and Cost Oil shall be allocated to each Party based on the pre-tax, nominal rate of return calculated on a quarterly basis for the Contract Area in accordance with the following sliding scale:: Contractor’s Rate of Return for Contract Area (% per annum) Government Share of Profit Oil Contractor Share of Profit Oil <19% 0% 100% >=19 %< 22% 10% 90% >=22%<26 % 20% 80% >=26%<29% 40% 60% >=29% 50% 50%
10.2 Beginning at the date of Commercial Discovery, Contractor’s rate of return shall be determined at the end of each Quarter on the basis of the accumulated compounded net cash flow for the Contract Area, using the following procedure:
(a) The Contractor’s net cash flow for the Contract Area for each Quarter is:
(i) The sum of Contractor’s Cost Oil and share of Contract Area Profit Oil regarding the Petroleum actually lifted in that Quarter at the Realizable Price;
Appears in 1 contract
Samples: Production Sharing Contract
RECOVERY OF OPERATING COSTS AND SHARING OF PETROLEUM PRODUCTION. 10.1 The allocation of Available Crude Oil shall be calculated on a Contract Area basis for Royalty Oil, Cost Oil and Profit Oil. This allocation of Available Crude Oil shall be in accordance with the Accounting ProceduresProcedure, the Allocation and Lifting Procedures Procedure and this Clause 10 as follows:
(a) Royalty Oil shall be allocated to the State from the first day of Production, based on the daily total of Available Crude Oil from the a Contract Area, set at a rate of 2%;
(b) Cost Oil shall be allocated to the Contractor in such quantum as will generate an amount of Proceeds sufficient for recovery of Operating Costs in the each Contract Area. All costs will be recovered in United States dollars through Cost Oil allocation;
(c) Cost Oil shall be not more than eighty percent (80%) % of Available Crude Oil in the each Contract Area after less deduction of Royalty Oil in any accounting period;
(d) Profit Oil, being the balance of Available Crude Oil after deducting Royalty Oil and Cost Oil shall be allocated to each Party based on the pre-tax, nominal rate of return calculated on a quarterly basis for the Contract Area in accordance with the following sliding scale:: <16% 0% 100% >=16 %< 19% 10% 90% >=19 %< 23% 20% 80% >=23 %< 26% 40% 60% >=26% 50% 50%
10.2 Beginning at the date of Commercial Discovery, Contractor’s 's rate of return shall be determined at the end of each Quarter on the basis of the accumulated compounded net cash flow for the each Contract Area, using the following procedure:
(a) The Contractor’s 's net cash flow for the a Contract Area for each Quarter is:
(i) The sum of the Contractor’s 's Cost Oil and share of Contract Area Profit Oil regarding the Petroleum actually lifted in that Quarter at the Realizable Price;
(ii) Minus Operating Costs;
(b) For this computation, neither any expenditure incurred prior to the date of Commercial Discovery for a Contract Area nor any Exploration Expenditure shall be included in the computation of the Contractor's net cash flow.
(c) The Contractor's net cash flows for each Quarter are compounded and accumulated for a Contract Area from the date of the Commercial Discovery according to the following formula: ACNCF (Current Quarter) = (100% + DQ) x ACNCF (Previous Quarter) + NCF (Current Quarter) 100% where: ACNCF = accumulated compounded net cash flow NCF = net cash flow DQ = quarterly compound rate (in percent) The formula will be calculated using quarterly compound rates (in percent) of 3,78%, 4.45%, 5.31%, and 5.95%, which correspond to annual compound rates ("DA") of 16%, 19%, 23%, and 26%, respectively.
(d) The Contractor's rate of return in any given Quarter for a Contract Area shall be deemed to be between the largest DA which yields a positive or zero ACNCF and the smallest DA which causes the ACNCF to be negative.
(e) The sharing of Profit Oil from a Contract Area between the State and the Contractor in a given Quarter shall be in accordance with the scale in paragraph (a) above using the Contractor's deemed rate of return as per paragraph (c) in the immediately preceding Quarter.
(f) In a given Contract Area, it is possible for the Contractor's deemed rate of return to decline as a result of negative cash flow in a Quarter with the consequence that Contractor's share of Profit Oil from that Contract Area would increase in the subsequent Quarter.
(g) Pending finalization of accounts, Profit Oil from the Contract Area shall be shared on the basis of provisional estimates, if necessary, of a deemed rate of return as approved by the National Petroleum Agency. Adjustments shall be effected with the procedure subsequently to be adopted by the National Petroleum Agency.
10.3 The quantum of Available Crude Oil to be allocated to each Party under this Contract shall be determined at the Delivery Point.
10.4 Each Party shall lift and dispose of its allocation of Available Crude Oil in accordance with the Allocation and Lifting Procedures as provided in Schedule 3. In the event of any reconciliation, the records of the National Petroleum Agency shall be the official, final and binding records.
Appears in 1 contract
Samples: Production Sharing Contract
RECOVERY OF OPERATING COSTS AND SHARING OF PETROLEUM PRODUCTION. 10.1 The allocation of Available Crude Oil shall be calculated on a Contract Area basis for Royalty Oil, Cost Oil and Profit Oil. This allocation of Available Crude Oil shall be in accordance with the Accounting ProceduresProcedure, the Allocation and Lifting Procedures Procedure and this Clause 10 as follows:
(a) Royalty Oil shall be allocated to the State from the first day of Production, based on the daily total of Available Crude Oil from the a Contract Area, set at a rate of two percent (2%);
(b) Cost Oil shall be allocated to the Contractor in such quantum as will generate an amount of Proceeds sufficient for recovery of Operating Costs in the each Contract Area. All costs will be recovered in United States dollars through Cost Oil allocation;
(c) Cost Oil shall be not more than eighty percent (80%) of Available Crude Oil in the each Contract Area after less deduction of Royalty Oil in any accounting period;
(d) Profit Oil, being the balance of Available Crude Oil after deducting Royalty Oil and Cost Oil Oil, shall be allocated to each Party based on the pre-tax, nominal rate of return calculated on a quarterly basis for the Contract Area in accordance with the following sliding scale:: >=16 %< 19% 10% 90% >=19 %< 23% 20% 80% >=23 %< 26% 40% 60% >=26% 50% 50%
10.2 Beginning at the date of Commercial Discovery, Contractor’s 's rate of return shall be determined at the end of each Quarter on the basis of the accumulated compounded net cash flow for the each Contract Area, using the following procedure:
(a) The Contractor’s 's net cash flow for the a Contract Area for each Quarter is:
(i) The sum of the Contractor’s 's Cost Oil and share of Contract Area Profit Oil regarding the Petroleum actually lifted in that Quarter at the Realizable Price;
(ii) Minus Operating Costs;
(b) For this computation, neither any expenditure incurred prior to the date of Commercial Discovery for a Contract Area nor any Exploration Expenditure shall be included in the computation of the Contractor's net cash flow.
(c) The Contractor's net cash flows for each Quarter are compounded and accumulated for a Contract Area from the date of the Commercial Discovery according to the following formula: ACNCF (Current Quarter) = (100% + DQ) x ACNCF (Previous Quarter) + NCF (Current Quarter) 100% where: ACNCF = accumulated compounded net cash flow NCF = net cash flow DQ = quarterly compound rate (in percent) The formula will be calculated using quarterly compound rates (in percent) of 3.78%, 4.45%, 5.31%, and 5.95%, which correspond to annual compound rates ("DA") of 16%, 19%, 23%, and 26%, respectively.
(d) The Contractor's rate of return in any given Quarter for a Contract Area shall be deemed to be between the largest DA which yields a positive or zero ACNCF and the smallest DA which causes the ACNCF to be negative.
(e) The sharing of Profit Oil from a Contract Area between the State and the Contractor in a given Quarter shall be in accordance with the scale in paragraph (a) above using the Contractor's deemed rate of return as per paragraph (c) in the immediately preceding Quarter.
(f) In a given Contract Area, it is possible for the Contractor's deemed rate of return to decline as a result of negative cash flow in a Quarter with the consequence that Contractor's share of Profit Oil from that Contract Area would increase in the subsequent Quarter.
(g) Pending finalization of accounts, Profit Oil from the Contract Area shall be shared on the basis of provisional estimates, if necessary, of a deemed rate of return as approved by the National Petroleum Agency. Adjustments shall be effected with the procedure subsequently to be adopted by the National Petroleum Agency.
10.3 The quantum of Available Crude Oil to be allocated to each Party under this Contract shall be determined at the Delivery Point.
10.4 Each Party shall lift and dispose of its allocation of Available Crude Oil in accordance with the Allocation and Lifting Procedures as provided in Schedule 3. In the event of any reconciliation, the records of the National Petroleum Agency shall be the official, final and binding records.
10.5 Allocation of Royalty Oil and Profit Oil shall be in the form of delivery of Production of Petroleum to the National Petroleum Agency and the National Petroleum Agency or other appropriate authority shall issue receipts for such delivery within thirty (30) days of lifting such Royalty Oil and Profit Oil. These receipts are issued by the National Petroleum Agency or other appropriate authority on behalf of the Government of Sao Tome and Principe.
10.6 Any Party may, at the request of any other Party, lift such other Party's Available Crude Oil, pursuant to Clause 10.3, and the lifting Party, within thirty (30) days, shall transfer to the account of the non-lifting Party the Proceeds of the sale to which the non-lifting Party is entitled. Overdue payments shall bear interest at the rate of LIBOR plus two percent (2%).
10.7 The State may sell to the Contractor all or any portion of its allocation of Available Crude Oil from the Contract Area under mutually agreed terms and conditions at the Realizable Price.
10.8 The Parties shall meet as and when agreed in the Allocation and Lifting Procedures to reconcile all Petroleum produced, allocated and lifted during the period in accordance with the Allocation and Lifting Procedures set forth in Schedule 3.
10.9 Notwithstanding the above, in lieu of lifting the State's Profit Oil and/or Royalty Oil, the State, upon one hundred eighty (180) days advance notice to the Operator, issued by the National Petroleum Agency, may elect to receive the State's allocation of Profit Oil and/or Royalty Oil in cash based on the Realizable Price rather than through lifting, regardless of whether or not the Contractor sells the State's Profit Oil and/or Royalty Oil to a third party. If the State elects to receive cash in lieu of lifting, the Operator shall lift the State's allocation of Profit Oil and/or Royalty Oil and pay into the National Petroleum Account cash in respect of such lifting within thirty (30) days from the end of the month in which the lifting occurred. Every six (6) months, the State may elect to have an entity designated by the State to resume lifting the State's allocation of Profit Oil and/or Royalty Oil, upon one hundred eighty (180) days notice to the Operator, prior to the date the State elects to have an entity, designated by the State, to resume lifting. In the event the State elects to receive its allocation of Profit Oil and or/Royalty Oil in cash, then the Contractor may charge a marketing fee to be mutually agreed.
Appears in 1 contract
Samples: Production Sharing Contract
RECOVERY OF OPERATING COSTS AND SHARING OF PETROLEUM PRODUCTION. 10.1 The allocation of Available Crude Oil shall be calculated on a Contract Area basis for Royalty Oil, Cost Oil and Profit Oil. This allocation of Available Crude Oil shall be in accordance with the Accounting ProceduresProcedure, the Allocation and Lifting Procedures Procedure and this Clause 10 as follows:
(a) Royalty Oil shall be allocated to the State from the first day of Production, based on the daily total of Available Crude Oil from the a Contract Area, set at a rate of two percent (2%);
(b) Cost Oil shall be allocated to the Contractor in such quantum as will generate an amount of Proceeds sufficient for recovery of Operating Costs in the each Contract Area. All costs will be recovered in United States dollars through Cost Oil allocation;
(c) Cost Oil shall be not more than eighty percent (80%) of Available Crude Oil in the each Contract Area after less deduction of Royalty Oil in any accounting period;
(d) Profit Oil, being the balance of Available Crude Oil after deducting Royalty Oil and Cost Oil shall be allocated to each Party based on the pre-tax, nominal rate of return calculated on a quarterly basis for the Contract Area in accordance with the following sliding scale:: <19% 0% 100% >=19 %< 22% 10% 90% >=22 %< 26% 20% 80% >=26 %< 29% 40% 60% >=29% 50% 50%
10.2 Beginning at the date of Commercial Discovery, Contractor’s rate of return shall be determined at the end of each Quarter on the basis of the accumulated compounded net cash flow for the each Contract Area, using the following procedure:
(a) The Contractor’s net cash flow for the a Contract Area for each Quarter is:
(i) The sum of the Contractor’s Cost Oil and share of Contract Area Profit Oil regarding the Petroleum actually lifted in that Quarter at the Realizable Price;
(ii) Minus Operating Costs;
(b) For this computation, neither any expenditure incurred prior to the date of Commercial Discovery for a Contract Area nor any Exploration Expenditure shall be included in the computation of the Contractor’s net cash flow.
(c) The Contractor’s net cash flows for each Quarter are compounded and accumulated for a Contract Area from the date of the Commercial Discovery according to the following formula: ACNCF (Current Quarter) = (100% + DQ) x ACNCF (Previous Quarter) + NCF (Current Quarter) 100% where: ACNCF = accumulated compounded net cash flow NCF = net cash flow DQ = quarterly compound rate (in percent) The formula will be calculated using quarterly compound rates (in percent) of 4.44%, 5.09%, 5.95%, and 6.57%, which correspond to annual compound rates (“DA”) of 19%, 22%, 26%, and 29%, respectively.
(d) The Contractor’s rate of return in any given Quarter for a Contract Area shall be deemed to be between the largest DA which yields a positive or zero ACNCF and the smallest DA which causes the ACNCF to be negative.
(e) The sharing of Profit Oil from a Contract Area between the State and the Contractor in a given Quarter shall be in accordance with the scale in clause
Appears in 1 contract
Samples: Production Sharing Contract
RECOVERY OF OPERATING COSTS AND SHARING OF PETROLEUM PRODUCTION. 10.1 The allocation of Available Crude Oil shall be calculated on a Contract Area basis for Royalty Oil, Cost Oil and Profit Oil. This allocation of Available Crude Oil shall be in accordance with the Accounting ProceduresProcedure, the Allocation and Lifting Procedures Procedure and this Clause 10 as follows:
(a) Royalty Oil shall be allocated to the State from the first day of Production, based on the daily total of Available Crude Oil from the a Contract Area, set at a rate of two percent (2%);
(b) Cost Oil shall be allocated to the Contractor in such quantum as will generate an amount of Proceeds sufficient for recovery of Operating Costs in the each Contract Area. All costs will be recovered in United States dollars through Cost Oil allocation;
(c) Cost Oil shall be not more than eighty percent (80%) of Available Crude Oil in the each Contract Area after less deduction of Royalty Oil in any accounting period;
(d) Profit Oil, being the balance of Available Crude Oil after deducting Royalty Oil and Cost Oil Oil, shall be allocated to each Party based on the pre-tax, nominal rate of return calculated on a quarterly basis for the Contract Area in accordance with the following sliding scale:
10.2 Beginning at the date of Commercial Discovery, Contractor’s 's rate of return shall be determined at the end of each Quarter on the basis of the accumulated compounded net cash flow for the each Contract Area, using the following procedure:
(a) The Contractor’s 's net cash flow for the a Contract Area for each Quarter is:
(i) The sum of the Contractor’s 's Cost Oil and share of Contract Area Profit Oil regarding the Petroleum actually lifted in that Quarter at the Realizable Price;
(ii) Minus Operating Costs;
(b) For this computation, neither any expenditure incurred prior to the date of Commercial Discovery for a Contract Area nor any Exploration Expenditure shall be included in the computation of the Contractor's net cash flow.
(c) The Contractor's net cash flows for each Quarter are compounded and accumulated for a Contract Area from the date of the Commercial Discovery according to the following formula: ACNCF (Current Quarter) = (100% + DQ) x ACNCF (Previous Quarter) + NCF (Current Quarter) 100% where: ACNCF = accumulated compounded net cash flow NCF = net cash flow DQ = quarterly compound rate (in percent) The formula will be calculated using quarterly compound rates (in percent) of 3.78%, 4.45%, 5.31%, and 5.95%, which correspond to annual compound rates ("DA") of 16%, 19%, 23%, and 26%, respectively.
(d) The Contractor's rate of return in any given Quarter for a Contract Area shall be deemed to be between the largest DA which yields a positive or zero ACNCF and the smallest DA which causes the ACNCF to be negative.
(e) The sharing of Profit Oil from a Contract Area between the State and the Contractor in a given Quarter shall be in accordance with the scale in paragraph (a) above using the Contractor's deemed rate of return as per paragraph (c) in the immediately preceding Quarter.
(f) In a given Contract Area, it is possible for the Contractor's deemed rate of return to decline as a result of negative cash flow in a Quarter with the consequence that Contractor's share of Profit Oil from that Contract Area would increase in the subsequent Quarter.
(g) Pending finalization of accounts, Profit Oil from the Contract Area shall be shared on the basis of provisional estimates, if necessary, of a deemed rate of return as approved by the National Petroleum Agency. Adjustments shall be effected with the procedure subsequently to be adopted by the National Petroleum Agency.
10.3 The quantum of Available Crude Oil to be allocated to each Party under this Contract shall be determined at the Delivery Point.
10.4 Each Party shall lift and dispose of its allocation of Available Crude Oil in accordance with the Allocation and Lifting Procedures as provided in Schedule 3. In the event of any reconciliation, the records of the National Petroleum Agency shall be the official, final and binding records.
Appears in 1 contract
