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

Transcription

1 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 1

2 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 2

3 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 3

4 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 Hybrid Contract. Concession Service Joint Venture 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). PSA 4

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

6 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 Moderate Return & Incentive to Contractor Minimum Return & Incentive to Contractor Higher Risk for IOCs Greater Government Control 6

7 1- Overview the basic Fiscal Regimes adopted by NOCs for Petroleum Exploration and Exploitation. (B) NOC`s and IOC`s Perspective Source: 7 Baker & Mckenzie: Comparative Analysis of Host Government Granting Instrument.

8 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 8

9 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 9

10 2-The Egyptian Petroleum Sector Structure 10

11 2-The Egyptian Petroleum Sector Structure EGPC STRATEGIC OBJECTIVES 11

12 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 12

13 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 13

14 3- Legal Framework For Petroleum Exploitation in Egypt. 14

15 3- Legal Framework For Petroleum Exploitation in Egypt. (A) 2014 CONSTITUTION -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. 15

16 3- Legal Framework For Petroleum Exploitation in Egypt. (B) E&P Agreements Overview 16

17 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 17

18 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 18

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

20 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 20

21 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 21

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

23 5- EGPC efforts to attract investment in the Egyptian upstream sector (A) Operating Companies and Partners. EGPC GPC NPC PICO INT. TRIDENT MASAWA THARWA SAHARA OIL & GAS GANOPE OCEANEER EL PASO APACHE IPR MERLON 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 ) ENGIE ( FRANCE ) TOTAL ( FRANCE ) VEGAS ( GREECE ) ENERGEAN ( GREECE ) NAFTO GAS ( Ukraine ) SHELL ( NETHERLAND ) Dea ( GERMANY ) INA-NAFTE ( CROATIA ) LUKOIL ( RUSSIA ) SHELL AUSTRIA ( AUSTRIA ) GREYSTONE ( SWITZERLAND ) CIRCLE OIL Egypt ( IRELAND ) HBSI ( TUNISIA ) KUWAIT ENREGY ( KUWAIT ) TRANSGLOBE ( CANADA ) MENA ( CANADA ) MEDITERRA ( CANADA ) SEA DRAGON ( CANADA ) SIPETROL ( CHILI ) DANA GAS ( EMIRATES ) VEGA ( EMIRATES ) GAS RAS EL KHEMA ( EMIRATES ) DRAGON OIL ( EMIRATES ) NORTH PETROLEUM NPIC ( CHINA ) TEIKOKU ( JAPAN ) SOJITZ ( JAPAN ) KUFPEC ( KUWAIT ) PETRONAS ( MALAYSIA ) SINOPEC ( CHINA ) QUADRA ( CANADA ) ODYSSEY ( CANADA ) DOVER ( CANADA ) BEACH ( AUSTRALIA ) OIL SEARCH ( AUSTRALIA ) TOTAL OPERATING COMPANIES and PARTNERS (58), NATIONALITIES (27) 23

24 5- EGPC efforts to attract investment in the Egyptian upstream sector (B) EGPC Agreements (1973 Jan., 2017) Total Agreements 433 Minimum obligation (U.S MM$) Signature Bonus (U.S MM$) Minimum number of wells

25 5- EGPC efforts to attract investment in the Egyptian upstream sector ( 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. 25

26 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 26

27 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 27

28 Challenges and Opportunities ( 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. 28

29 Challenges and Opportunities ( A ) OPPORTUNITIES The New Discoveries in the Mediterranean. The New Gas Law. Varieties over the applied fiscal regime. 29

30 Contacts For further information, please contact: Dr. Geologist / Deputy Chief Executive Officer for Exploration and Agreements supervisor:- Tel. : (202) (202) Fax : (202) (202) bidround@egpc.com.eg Website: 30

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