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

MAIN FEATURES OF THE REGULATORY FRAME WORK FOR PETROLEUM EXPLOITATION IN EGYPT MOSTAFA ELSHAZLY Attorney at law- Petroleum Agreements Dep. The Egyptian General petroleum Corporation Email: mostafaia@egpc.com.eg NORTH AFRICA OIL AND GAS SUMMIT- 1 MILAN 2017

Content 1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 2- The Egyptian petroleum sector structure. 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 NORTH AFRICA OIL AND GAS SUMMIT- 2 MILAN 2017

Content 1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 2- The Egyptian petroleum sector structure. 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 NORTH AFRICA OIL AND GAS SUMMIT- 3 MILAN 2017

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. (A) Host Governments E&P Contracts  It is also possible to have a Concession Service Joint Venture PSA Hybrid Contract. 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). NORTH AFRICA OIL AND GAS SUMMIT- 4 MILAN 2017

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. (A) Host Governments E&P Contracts Right To Explore Ownership of Agreement Type Production Concession Private Private Shared Shared Joint Venture Production Shared Shared Sharing State State Service Contract 5 NORTH AFRICA OIL AND GAS SUMMIT- MILAN 2017

1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. (B) NOC`s and IOC`s Perspective Maximum Return & Incentive to Contractor Higher Risk for IOCs Greater Government Control Moderate Return & Incentive to Contractor Minimum Return & Incentive to Contractor NORTH AFRICA OIL AND GAS SUMMIT- 6 MILAN 2017

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. 7 NORTH AFRICA OIL AND GAS SUMMIT- MILAN 2017

Content 1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 2- The Egyptian petroleum sector structure. 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 NORTH AFRICA OIL AND GAS SUMMIT- 8 MILAN 2017

Content 1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 2- The Egyptian petroleum sector structure. 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 NORTH AFRICA OIL AND GAS SUMMIT- 9 MILAN 2017

2- The Egy he Egyptian Pet Petroleu eum Sec Sector St Structure NORTH AFRICA OIL AND GAS SUMMIT- 10 MILAN 2017

2- The Egy he Egyptian Pet Petroleu eum Sec Sector St Structure EGPC STRATEGIC OBJECTIVES 11 NORTH AFRICA OIL AND GAS SUMMIT- MILAN 2017

Content 1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 2- The Egyptian petroleum sector structure. 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 NORTH AFRICA OIL AND GAS SUMMIT- 12 MILAN 2017

Content 1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 2- The Egyptian petroleum sector structure. 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 NORTH AFRICA OIL AND GAS SUMMIT- 13 MILAN 2017

3- Legal Framework For Petroleum Exploitation in Egypt. NORTH AFRICA OIL AND GAS SUMMIT- 14 MILAN 2017

3- Legal Framework For Petroleum Exploitation in Egypt. (A) 2014 CONSTITUTION -Natural resources belong to the The state protects ownership. people. May not be confiscated except for the -The state commits to preserving public interest and with just such resources, to their ideal compensation that is paid in advance as exploitation. per the law. -The state works on encouraging the Private sector social responsibility manufacture of raw materials,. The state encourages the private sector to perform its social responsibility in -Increasing their added value serving the national economy and according to economic feasibility. society. 15 NORTH AFRICA OIL AND GAS SUMMIT- MILAN 2017

3- Legal Framework For Petroleum Exploitation in Egypt. (B) E&P Agreements Overview NORTH AFRICA OIL AND GAS SUMMIT- 16 MILAN 2017

Content 1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 2- The Egyptian petroleum sector structure. 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 NORTH AFRICA OIL AND GAS SUMMIT- 17 MILAN 2017

Content 1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 2- The Egyptian petroleum sector structure. 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 NORTH AFRICA OIL AND GAS SUMMIT- 18 MILAN 2017

4- Key provisions of Production Sharing Agreements (PSAs) in Egypt. PARTIES GOVERNMENT IOC EGPC KEY PROVISIONS GRANT OF RIGHTS AND TERM BONUSES AND TAXES MINIMUM WORK PROGRAM STABILIZATION RELINQUISHMENT FORCE MAJEURE COMMERCIAL DISCOVERY DISPUTE RESOLUTION JOINT OPERATING COMPANY ASSIGNMENT Production Split and Cost LOCAL CONTENT Recovery 19 NORTH AFRICA OIL AND GAS SUMMIT- MILAN 2017

Content 1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 2- The Egyptian petroleum sector structure. 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 NORTH AFRICA OIL AND GAS SUMMIT- 20 MILAN 2017

Content 1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. 2- The Egyptian petroleum sector structure. 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 NORTH AFRICA OIL AND GAS SUMMIT- 21 MILAN 2017

5- EGPC efforts to attract investment in the Egyptian upstream sector Cost Recovery Contractor PRODUCTION SHARING Cost recovery ceiling Bidding limit SYSTEM Excess EGPC & Contractor NO DISCOVERY DISCOVERY Profit Oil or COST RECOVERY CONTRACTOR Gas EGPC & Contractor + BEARS ALL PRODUCTION EXPLORATION SHARING RISKS NORTH AFRICA OIL AND GAS SUMMIT- 22 MILAN 2017