PSAs

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Production sharing agreements (PSAs) are a common type of contract signed between a government and a resource extraction company (or group of companies) concerning how much of the resource (usually oil) extracted from the country each will receive. PSAs were first used in Bolivia in the early 1950s, although their first implementation similar to today's was in Indonesia in the 1960s.[1] Today they are often used in the Middle East andCentral Asia. In PSAs the country's government awards the execution of exploration and production activities to an oil company. The oil company bears the mineral and financial risk of the initiative and explores, develops and ultimately produces the field as required. When successful, the company is permitted to use the money from produced oil to recover capital and operational expenditures, known as "cost oil". The remaining money is known as "profit oil", and is split between the government and the company, typically at a rate of about 80% for the government, 20% for the company. In some PSAs, changes in international oil prices or production rate can affect the company's share of production. PSAs can be beneficial to governments of countries that lack the expertise and/or capital to develop their resources and wish to attract foreign companies to do so. They can be very profitable agreements for the oil companies involved, but often involve considerable risk.

Iraq poised to be second in oil league table. December 11 2009 19:39. Iraq is on course to overtake Iran as the holder of the world’s second-largest proven oil reserves, solidifying its position as the energy industry’s new frontier in the scramble to secure fresh resources. Baghdad agreed on Friday to deals with Royal Dutch Shell and China’s CNPC for two large oilfields, following on from similar accords withExxonMobil, Eni and BP .“These are not small companies. They have been studying Iraq for some time,” he said. Mr Alkadiri warned that the resurgence of Iraq as a significant oil producer would cause problems within Opec, as the oil cartel would eventually have to reduce the production quotas of many of its members to accommodate Iraq. Iraq’s quota has not been enforced since UN imposed sanctions in the early 1990s. The deal’s terms suggested that Iraq pays $1.39 for each incremental barrel of oil – a very low fee that reflected the fierce level of competition, analysts said. Iraq’s auction is not yet over. The oil ministry will auction off several additional fields on Saturday, including the giant West Qurna one.

Costs and security fears weigh on Iraq oil auction. 44 minutes ago. BAGHDAD — Iraqi officials cheered and clapped as the first oil field up for bid went to a major international consortium at the opening of the country's biggest postwar auction Friday. But from there, the chill set in. It netted only one deal on the spot: Britain's BP and CNPC nabbed the 17.8 billion barrel Rumaila field in the south. Deals on two other southern fields were brokered later. Mark Gilman, an analyst with The Benchmark Company, said most oil companies wouldn't put up with the risks in Iraq were it not for the vast reserves underfoot. "The reason for participation, in my view, is to get a foot in the door," Gilman said. Oil companies are wagering that not only will the security improve, but that the country eventually will offer more lucrative production deals, he said. Friday was the opening of the two-day international licensing round, in which 15 fields with roughly one-third of Iraq's 115 billion barrels in reserves are on the auction block. Successful deals for all 15 fields could have potentially boosted Iraq's production by another 2.6 million barrels per day over the next decade. Two of the bids that were successful, however, include giant oil plays. The Majnoon field is a 12.58-billion barrel behemoth. The Halfaya field contains an estimated 4.1 billion-barrels. A consortium grouping Shell and Malaysia's state-run Petronas beat out France's Total SA and China National Petroleum Corp., or CNPC, to win Majnoon. Shell-Petronas will take $1.39 per barrel produced and said they would raise production from the current 45,900 barrels per day to 1.8 million barrels per day over 10 years. Halfaya was won by CNPC, Petronas and Total, beating out three other consortiums led by Italy's Eni, Norway's Statoil ASA and India's ONGC. The consortium will get $1.40 per barrel produced and plans to raise production from the current 3,100 barrels per day to 535,000 barrels per day over 13 years. Five fields located in more restive regions received no bids. Four were in Diyala province, home to some of the country's most violent areas. The fifth — the central and northern part of the East Baghdad field — fell victim as much to its location as to security fears. That field, with estimated reserves of about 8 billion barrels, holds harder-to-refine heavy oil and is situated mainly in residential areas that make it difficult to exploit. The day's final field, Qayara, in Ninevah province in the north, drew only one bid, which was rejected. Angola's Sanongol said it wanted $12.5 per barrel, more than twice what Iraq was willing to pay. The biggest prize of the auction — West Qurna Phase 2 with its 12.88 billion barrels in reserves — is to be auctioned Saturday, along with six other fields. West Qurna is expected to see fierce bidding because of its reserves and its southern location. The others are all significantly smaller and in areas of central or northern Iraq.

Fapomed abre fábrica na Ucrânia. Inaugura amanhã, em Rivne, a unidade de batas cirúrgicas da Fapomed. Empresa de Felgueiras investe sete milhões de euros para combater concorrência chinesa. 11:10 Quinta-feira, 10 de Dez de 2009. A Fapomed, uma empresa de Felgueiras de dispositivos médicos, escolheu a Ucrânia pelos factores de custo e vantagens geográficas. Em 2011, a unidade contará com 400 postos de trabalho, facturando 10 milhões de euros. Na fase inicial emprega 65 operários. A operação na Ucrânia é uma resposta à ameaça chinesa e estava a ser preparada há três anos, no rescaldo do sobressalto concorrencial, após a abertura dos mercados europeus aos produtos asiáticos. Um contrato com uma multinacional farmacêutica para o fornecimento de um volume considerável de batas cirúrgicas foi o empurrão que faltava para o projecto avançar. A unidade (5 mil m2 de área coberta) custou 7 milhões de euros.

Ukraine appeals to IMF for $2bn loan. December 11 2009 12:41. Ukraine has made an urgent appeal to the International Monetary Fund for about $2bn in emergency loans to ease “an extremely difficult situation” in meeting its external obligations and avoid the danger of a “spill-over effect” on other economically vulnerable states. “The next three months are crucial, Ukraine’s deputy prime minister, told the Financial Times one day after returning from a mission to the IMF’s headquarters in Washington.
“Wait and see is not an option. The cost of inaction is greater than the cost of action and may aggravate the situation in the wider region.”