Final Production Sharing Agreement

Production-sharing agreements were first used in Bolivia in the early 1950s, although their first implementation was similar to that of today in Indonesia in the 1960s. [1] Today, they are often used in the Middle East and Central Asia. Stopping costs gives the government the guarantee of recovering some of the production (as long as the price of crude oil produced is higher than the cost-stopping), especially in the early years of production when costs are higher. Since the early 1980s, all large-scale contracts have contained an immutable non-cost clause. Stopping costs can be a fixed amount, but in most cases it is a percentage of the cost of crude oil. Sakhaline Energy signed PSA in 1994 and began production of Molikpaq platab oil in 1999, as well as concessions (licenses), are the most common types of agreements used in the global oil and gas industry. Indonesia was the first country to begin using production agreements related to the distribution of production into a common instrument to allow foreign companies to exploit local oil fields. The first PSA was signed in 1960. Today, PPE is used in more than 60 countries. Production-sharing agreements can be beneficial for governments in countries that lack expertise and/or capital to develop their resources and wish to attract foreign companies. They can be very profitable agreements for the oil companies involved, but they often present a significant risk. Risk-sharing contracts (RSCs), first introduced in Malaysia, depart from the production-sharing contract (PSC), which was introduced in 1976 and was recently revised last year as an oil recovery amp toP(PSC), which increased the recovery rate from 26% to 40%. As a high-yield agreement, it is being developed in Malaysia for the population and private partners, in order to benefit from both a successful and vibrant monetization of these peripheral areas.

During the Asia Forum production optimization week of the Center for Energy Sustainability and Economics in Malaysia, July 27, 2011, Finance Minister YB. Sen. Dato`Ir. Donald Lim Siang Chai said that the pioneering RSC requires optimal implementation of production targets and allows the transfer of knowledge between foreign and local players in the development of Malaysia`s 106 marginal fields, which contain a total of 580 million barrels of oil equivalent (BOE) in the current high-demand and low-resource market. [2] In production-sharing agreements, the country`s government entrusts the conduct of exploration and production activities to an oil company. The oil group supports the mineral and financial risk of the initiative and explores, develops and produces the field as needed. During the successful year, the company can use the money from the oil produced to recover capital and operating expenses known as “cost oil.” The rest of the money is called “profit oil” and is shared between the government and the company. In most production allocation agreements, changes in international oil prices or the rate of production affect the company`s share of production.

In 2019, the KPO reached record levels of 138 million boe (oil equivalent barrels) of stabilized and unstabilized liquid hydrocarbons, crude gas and fuel gas. 8.7 billion cubic metres of gas, or about 47 per cent of the gas produced, was re-injected to maintain reservoir pressure.