** #1 more favorable conditions for oil and gas production sharing agreements will come into effect in the first quarter of 2019: the Ministry of Petroleum plans to introduce new production sharing contracts in the first quarter of 2019, with more favorable conditions for international oil companies, after finalizing its next tender for Red Sea exploration blocks at the end of this year. Unidentified sources in the ministry say Bloomberg. The new framework would provide that companies “assume the costs of exploration and production in exchange for a share of production,” which will vary from concession to concession, depending on investment costs, according to the sources. It would also allow companies to sell their share of production to each unit of their choice, unlike the current system, which gives them only a third of production and allows the government “to buy the entire producer`s share at predetermined prices.” Existing contracts will not be affected by the new system, the sources added, noting that it would only apply to “untapped border areas.” Today, the global oil exploration and production industry presents many challenges. One of the main challenges is the decline in the price of oil, which has had a negative impact on the continuation of exploration activities. Such a challenge requires governments to further encourage investors to invest more, especially in areas with high risk and complex geological structure (e.g. B deep and ultra-deep lenses). There are several instruments for the host government to incentivize IoCs to invest more in exploration projects, the easiest way to achieve the above objective is to make the terms of licensing agreements more favorable for KICs in order to increase profitability and improve the rapid recovery of operating and capital costs and maintain a healthy and safe political environment. In addition, the oil exploration and exploitation tax regime put in place by NOCs can be a window that creates a win-win situation between CICs and NOCs, and there are different types of tax systems known for oil exploitation (production division, service, concession and joint venture). Each country has its contractual framework for oil exploration and production and the country`s decision to introduce a particular contractual system does not mean the invalidity of other contract models that must be applied. The aim of this presentation is to highlight the fundamental tax regimes adopted by NOCs for oil exploration and exploitation and the main differences between the different types of contracts, in order to understand this relationship and the context in which it is adopted.
Next, we focus on a case study of the Egyptian upstream sector, showing the development of E&P agreements in Egypt and the main provisions of production sharing agreements (PPE). Russia`s state-owned energy company Zarubezhneft has joined two offshore oil concessions in Egypt as part of a production-sharing deal, Reuters` Arabic service reports, without revealing the value of the deal or the other party. . . .
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