In this course participants will learn about the petroleum upstream fiscal systems and the contractual instruments governments use to grant to oil companies the right to explore, develop and exploit hydrocarbon fields. By using industry specific case studies, examples and exercises this course will enhance participants knowledge of the typical features of each system, how they impact the economics of the field from both the oil company's and the government's viewpoint.
Course Level: Skill
Designed for you, if you are...
Involved at any level in business development, contract negotiations, business analysis, strategic planning, joint-venture representation or investment in petroleum projects and would like to develop a more in-depth general understanding of international oil and gas exploitation contracts
How we build your confidence
This course makes extensive use of petroleum industry case studies, examples and exercises, with delegates working individually and in teams when tackling a variety of industry-specific challenges.
By the end of the course you will feel confident in your understanding of:
The structure and benefits of different types of international contracts for petroleum exploration, development and production
The key elements of oil and gas exploitation contracts
How to structure the agreement(s) to meet your company's needs
The different needs and expectations of national and international oil and gas companies
Non-financial elements and their impact on economics and profitability
How to identify and manage appropriately the risks and opportunities in the contract terms
How to differentiate between oil and gas exploitation and marketing issues involved in gas contracts
How to model the changing parameters in a typical PSC
What are "international exploitation contracts" and how do they work? - The key differences between PSCs, concessions, service contracts and joint-venture contracts - The rights and obligations of the parties at each stage
Why do we have PSCs? - Understand what PSCs are designed to do and how they are evolving
Who gets the production? - How to work out the production splits - Untangling the "R factor"
How are the contracts dealt with in the exploration phase? - Managing timescales, minimum work programs, appraisal and relinquishment - Setting criteria, evaluating and agreeing "commerciality"
What are the objectives in the development and production phase? - Differences between host countries and contracting companies and how to bridge the gaps - Bonuses, royalties, taxes and pricing issues
Where is the balance of risk in the contract provisions? - Using incentives structures to even out the upsides and downsides of the contract terms for each party - The challenge of decommissioning obligations
How to manage the economics of international contracts - Tools for assessing the value of success and the cost of failure - How do we set the right price? - Special issues for marginal fields
Who pays for and carries the risk during development programs? - Where to find sources of funding from the public and private sector - How are "non-financial issues" dealt with? - How to meet national policies and contract commitments for employment, training, local purchasing and HSE compliance
How is cost recovery set up and managed?
What are the effects of unitisation and redetermination?
In what ways are gas contracts different? - Special considerations for natural gas and LNG production, transportation, processing and sales agreements - Understanding the LNG marketplace
Future trends - Has the traditional PSC had its day? - Recent developments in contracting - The changing role of IOCs
"Good recap of concepts and good discussions. Experienced and well-rounded trainer. The materials suited the objective of the course." - Al Hosn Gas
"The trainer is excellent who has worldwide experience and knowledge in oil & gas exploration contracts, and therefore by attending this training I have increased my knowledge on types of agreements for E&P, fiscal regimes, negotiation, D&P as well as unitisation and redetermination" - Autoridade Nacional do Petroleo