Gov’t giving oil majors friendlier terms in production sharing contracts: The Oil Ministry is looking to keep international oil companies happy, having recently rolled out new production sharing contracts with some IOCs that leave the companies larger shares of profits from concessions in a bid to cut the time it takes for the companies to hit profitability on any one concession, ministry sources tell Al Masdar.
The changes include eliminating a clause in the model contract that required the companies cede a additional points in their concessions to the government every two years. The new agreements also apparently raise the cost-recovery ceiling to 40% of the oil or gas produced by a concession, up from 35%, the newspaper claims. Oil and gas companies were consulted during the drafting of the changes and their recommendations factored into the changes, the source said.
Caveat lector: The single-source story doesn’t cite anyone from the private sector, so we’ll be looking into this in a bit more detail in the days ahead.
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