MAIN FEATURES OF THE REGULATORY FRAME WORK FOR PETROLEUM - - PowerPoint PPT Presentation

MOSTAFA ELSHAZLY

Attorney at law- Petroleum Agreements Dep. The Egyptian General petroleum Corporation Email: mostafaia@egpc.com.eg

MAIN FEATURES OF THE REGULATORY FRAME WORK FOR PETROLEUM EXPLOITATION IN EGYPT

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Content

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 3- Legal Framework For Petroleum Exploitation in Egypt 4- Key Provisions of Production Sharing Agreements (PSAs) in Egypt. 5- EGPC efforts to attract investment in the Egyptian upstream sector. 6- Challenges and Opportunities 2- The Egyptian petroleum sector structure.

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Content

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 3- Legal Framework For Petroleum Exploitation in Egypt 4- Key Provisions of Production Sharing Agreements (PSAs) in Egypt. 5- EGPC efforts to attract investment in the Egyptian upstream sector. 6- Challenges and Opportunities 2- The Egyptian petroleum sector structure.

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1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation.

Some states ‘mix and match’ different features of the four principal types of Host Government Contracts to ‘blended flavors’. (e.g. North Alex Model Agreement for petroleum exploration and exploitation).

• It is also possible to have a

Hybrid Contract.

Joint Venture

PSA Service Concession (A) Host Governments E&P Contracts

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1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation.

Agreement Type Right To Explore Private Shared State Concession Joint Venture Production Sharing Service Contract Ownership of Production Shared Private Shared Shared State (A) Host Governments E&P Contracts

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1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation.

(B) NOC`s and IOC`s Perspective Greater Government Control

Maximum Return & Incentive to Contractor Moderate Return & Incentive to Contractor Minimum Return & Incentive to Contractor

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Higher Risk for IOCs

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1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation.

(B) NOC`s and IOC`s Perspective

Source: Baker & Mckenzie: Comparative Analysis of Host Government Granting Instrument. NORTH AFRICA OIL AND GAS SUMMIT- MILAN 2017

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Content

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 3- Legal Framework For Petroleum Exploitation in Egypt 4- Key Provisions of Production Sharing Agreements (PSAs) in Egypt. 5- EGPC efforts to attract investment in the Egyptian upstream sector. 6- Challenges and Opportunities 2- The Egyptian petroleum sector structure.

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Content

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 3- Legal Framework For Petroleum Exploitation in Egypt 4- Key Provisions of Production Sharing Agreements (PSAs) in Egypt. 5- EGPC efforts to attract investment in the Egyptian upstream sector. 6- Challenges and Opportunities 2- The Egyptian petroleum sector structure.

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2-The Egy he Egyptian Pet Petroleu eum Sec Sector St Structure

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2-The Egy he Egyptian Pet Petroleu eum Sec Sector St Structure

EGPC STRATEGIC OBJECTIVES

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Content

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 3- Legal Framework For Petroleum Exploitation in Egypt 4- Key Provisions of Production Sharing Agreements (PSAs) in Egypt. 5- EGPC efforts to attract investment in the Egyptian upstream sector. 6- Challenges and Opportunities 2- The Egyptian petroleum sector structure.

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Content

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 3- Legal Framework For Petroleum Exploitation in Egypt 4- Key Provisions of Production Sharing Agreements (PSAs) in Egypt. 5- EGPC efforts to attract investment in the Egyptian upstream sector. 6- Challenges and Opportunities 2- The Egyptian petroleum sector structure.

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3- Legal Framework For Petroleum Exploitation in Egypt.

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3- Legal Framework For Petroleum Exploitation in Egypt.

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• Natural resources belong to the

people.

• The state commits to preserving

such resources, to their ideal exploitation.

• The state works on encouraging the

manufacture of raw materials,.

• Increasing

their added value according to economic feasibility.

The state protects ownership.

May not be confiscated except for the

public interest and with just compensation that is paid in advance as per the law.

Private sector social responsibility

The state encourages the private sector to perform its social responsibility in serving the national economy and society.

(A) 2014 CONSTITUTION

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3- Legal Framework For Petroleum Exploitation in Egypt.

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(B) E&P Agreements Overview

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Content

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 3- Legal Framework For Petroleum Exploitation in Egypt 4- Key Provisions of Production Sharing Agreements (PSAs) in Egypt. 5- EGPC efforts to attract investment in the Egyptian upstream sector. 6- Challenges and Opportunities 2- The Egyptian petroleum sector structure.

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Content

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 3- Legal Framework For Petroleum Exploitation in Egypt 4- Key Provisions of Production Sharing Agreements (PSAs) in Egypt. 5- EGPC efforts to attract investment in the Egyptian upstream sector. 6- Challenges and Opportunities 2- The Egyptian petroleum sector structure.

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4- Key provisions of Production Sharing Agreements (PSAs) in Egypt.

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GOVERNMENT EGPC IOC

KEY PROVISIONS BONUSES AND TAXES GRANT OF RIGHTS AND TERM MINIMUM WORK PROGRAM RELINQUISHMENT COMMERCIAL DISCOVERY Production Split and Cost Recovery STABILIZATION FORCE MAJEURE DISPUTE RESOLUTION ASSIGNMENT JOINT OPERATING COMPANY LOCAL CONTENT

PARTIES

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Content

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 3- Legal Framework For Petroleum Exploitation in Egypt 4- Key Provisions of Production Sharing Agreements (PSAs) in Egypt. 5- EGPC efforts to attract investment in the Egyptian upstream sector. 6- Challenges and Opportunities 2- The Egyptian petroleum sector structure.

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Content

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 3- Legal Framework For Petroleum Exploitation in Egypt 4- Key Provisions of Production Sharing Agreements (PSAs) in Egypt. 5- EGPC efforts to attract investment in the Egyptian upstream sector. 6- Challenges and Opportunities 2- The Egyptian petroleum sector structure.

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5- EGPC efforts to attract investment in the Egyptian upstream sector

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PRODUCTION SHARING SYSTEM

NO DISCOVERY DISCOVERY CONTRACTOR BEARS ALL EXPLORATION RISKS COST RECOVERY + PRODUCTION SHARING

Cost Recovery

Cost recovery ceiling Bidding limit

Profit Oil or Gas

Contractor

Excess

EGPC & Contractor

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EGPC & Contractor

5- EGPC efforts to attract investment in the Egyptian upstream sector

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(A) Operating Companies and Partners.

APACHE IPR MERLON

SHELL AUSTRIA ( AUSTRIA ) GREYSTONE ( SWITZERLAND ) CIRCLE OIL Egypt ( IRELAND ) ENGIE ( FRANCE ) TOTAL ( FRANCE ) VEGAS ( GREECE ) ENERGEAN ( GREECE ) NAFTO GAS ( Ukraine ) SHELL ( NETHERLAND ) Dea ( GERMANY ) INA-NAFTE ( CROATIA ) LUKOIL ( RUSSIA ) THARWA SAHARA OIL & GAS GANOPE EGPC GPC NPC PICO INT. TRIDENT MASAWA BP ( U.K ) BG ( U.K ) PERENCO ( U.K ) AMINEX ( U.K ) DANA ( U.K ) PETROCELTIC ( U.K ) BURREN ( U.K ) eni ( ITALY ) EDISON ( ITALY ) CEPSA ( SPAIN )

TOTAL OPERATING COMPANIES and PARTNERS (58), NATIONALITIES (27)

SIPETROL ( CHILI ) DANA GAS ( EMIRATES ) VEGA ( EMIRATES ) GAS RAS EL KHEMA ( EMIRATES ) DRAGON OIL ( EMIRATES ) NORTH PETROLEUM “NPIC”( CHINA ) HBSI ( TUNISIA ) KUWAIT ENREGY ( KUWAIT ) TRANSGLOBE ( CANADA ) MENA ( CANADA ) MEDITERRA ( CANADA ) SEA DRAGON ( CANADA ) QUADRA ( CANADA ) ODYSSEY ( CANADA ) DOVER ( CANADA ) BEACH ( AUSTRALIA ) OIL SEARCH ( AUSTRALIA ) TEIKOKU ( JAPAN ) SOJITZ ( JAPAN ) KUFPEC ( KUWAIT ) PETRONAS ( MALAYSIA ) SINOPEC ( CHINA )

OCEANEER EL PASO NORTH AFRICA OIL AND GAS SUMMIT-

5- EGPC efforts to attract investment in the Egyptian upstream sector

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(B) EGPC Agreements (1973 – Jan., 2017)

22870 Minimum obligation (U.S MM$) 2848.3 Signature Bonus (U.S MM$) 1597 Minimum number of wells

Total Agreements 433

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5- EGPC efforts to attract investment in the Egyptian upstream sector

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( C ) Start E&P Business in Egypt

INTERNATIONAL BID ROUND FOR PETROLEUM EXPLOIATION.

• Announcement For International Bid

Round.

• Bidding Procedures.
• Main Contract Terms and Conditions.
• Technical Report Exploration Blocks.
• FARM IN / FARM OUT current

existing PSA

• Fulfilling all commitments in the

PSA.

• Technical and financial capability.
• Approval by the MOP required.

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Content

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 3- Legal Framework For Petroleum Exploitation in Egypt 4- Key Provisions of Production Sharing Agreements (PSAs) in Egypt. 5- EGPC efforts to attract investment in the Egyptian upstream sector. 6- Challenges and Opportunities 2- The Egyptian petroleum sector structure.

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Content

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 3- Legal Framework For Petroleum Exploitation in Egypt 4- Key Provisions of Production Sharing Agreements (PSAs) in Egypt. 5- EGPC efforts to attract investment in the Egyptian upstream sector. 6- Challenges and Opportunities 2- The Egyptian petroleum sector structure.

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Challenges and Opportunities

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( A ) CHALLENGES  The development of Unconventional resources.  Encouraging investment in deep and ultra deep

targets in all areas (e.g. Mediterranean, Western/Eastern Desert, Nile Delta and Gulf of Suez).

 A comprehensive legal frame work to stream line

Bid round processes.

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Challenges and Opportunities

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( A ) OPPORTUNITIES

 The New Discoveries in the Mediterranean.  The New Gas Law.  Varieties over the applied fiscal regime.

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Contacts

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For further information, please contact:

• Dr. Geologist / Deputy Chief Executive Officer for Exploration and Agreements

supervisor:-

• Tel. : (202) 27065227 (202) 27065358
• Fax : (202) 27065207 (202) 27065887
• E-mail : bidround@egpc.com.eg
• Website: www.egpc.com.eg

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