Sei sulla pagina 1di 46

www.themegallery.

com

LOGO

Exploration Production Shearing Agreement EPSA

LOGO

Contents

1 2

Introduction
History Of Libyan Oil Agreement EPSA 3 Model & Example

3
4

Conclusion Of EPSA

www.themegallery.com

LOGO

Introduction
NOC in Brief The national oil corporation (NOC) was established on 12 November 1970, under law No: 10/1970 to assume the responsibility of the oil sector operations. It was later reorganized under decision No: 10/1979 by the General secretariat of the General People's Congress, to undertake the realization of the objectives of the development plan in the areas of petroleum, supporting the national economy through increasing, developing and exploiting the oil reserves and operating and investing in those reserves, to realize optimum return. In carrying out its activities, NOC may enter in to participation agreements with other companies and corporations carrying out similar activities.
www.themegallery.com

LOGO

Introduction
Therefore, NOC is carrying out exploration and production operation through its own affiliated companies, or in participation with other companies under service contracts or any other kind of petroleum investment agreements. This is in addition to marketing operations of oil and gas, locally and abroad. For this purpose, NOC has its own fully owned companies which carry out exploration, development and production operations, in addition to local and international marketing companies. NOC also has participation agreements with specialized international companies. Such agreements have developed in to exploration and production sharing agreements, in accordance with the development of the international oil and gas industry, and international petroleum marketing. NOC owns refining, and oil and gas processing companies, operating refineries such as Zawia and Raslanuf refineries, ammonia, urea and methanol plants, the Raslanuf petrochemical complex and the gas processing plan. To establish petrochemical industry, anther stage of development of the ethylene plant has been completed, as well as the law and high density linear polyethylene plants.
www.themegallery.com

LOGO

Introduction
NOC also own national service companies witch carry out oil well drilling and work over operations, provide all drilling material and equipment, lay and maintain oil and gas pipe lines, build and maintain oil and gas storage tanks and carry out related technical and economic studies. They also provide the sector with other services, such as catering, procurement of materials and also equipment, training and employment of foreign employees. Also affiliated to NOC is petroleum researches center witch carries out research and technical studies related to the oil industry, conducts technical analysis and tests for the various stages of exploration and production of oil and petroleum products, performs quality control tests and issues certificates in this respect. It also evaluates patents licenses of exploration and the fees and forms related to oil operations and petroleum products.

www.themegallery.com

LOGO

Introduction
It publishes the studies carried out by the center in the publication of the center, as well as the local and international scientific publications. In the areas of man power development, NOC provides the oil industry with qualified nationals within a well planned scheme founded on a base of education and training institutions, for training and developing qualified man power in such professions as engineering, accounting and administration. Training out side the Great Jamahiriya is limited to those technical specializations witch are not available locally, to cope with the rapid development of the industry. Technical training is being carried out at the training centers and institution belonging to NOC, to develop specialized technicians for the operation and maintenance of industrial facilities and plants.

www.themegallery.com

LOGO

Introduction
Exploration and production activity: This activity carries out by NOC full owned companies and joint ventures companies and exploration production sharing companies, and which works under participation agreements or exploration production sharing agreements, and this activity covers wide on sure and off sure area of country. In this time we have (10) production companies and those capacity reached to (1.8 million barrel of oil per day) and (3 billion cubic feet of gas per day), probably this production rates increases at next five years due to multiple activities for production companies and several of participation and sharing contracts which signed with some of international companies.

www.themegallery.com

LOGO

Introduction
The exploration and development activity increases due to the increasing of numbers of rigs from (25 rig) to (60 rig) in middle 2008, thats indication for the level of activity to reach to the desired production rate. The technical studies and exploration operations were proven the Great Jamahiriya opportunities in investments so great, and also it has a special geographic location in Mediterranean which make it one of important oil markets in Europe, as well as it has its own huge oil and gas pipe line network, Great Jamahiriya also has multi facilities to export own products To Europe markets.

www.themegallery.com

LOGO

Introduction
The Investment in petroleum exploration production areas:
NOC has adopted a policy for encouraging foreign investment in oil & gas exploration through Bidding Rounds, for exploration areas spread over various onshore & offshore sites in Libya. The Bidding Rounds are open for qualified international oil companies willing to bear the risk of investing in oil & gas exploration. To day, NOC has conducted four consecutive bidding rounds beginning in September 2004 until December 2007 as follows: First Round January 2005, where 15 areas were offered & EPSA agreements were signed with 12 international oil companies. Second Round October 2005, where 26 areas were offered & EPSA agreements were signed with 15 international oil companies. Third Round December 2006, where 14 areas were offered & EPSA agreements were signed with 10 international companies. Fourth Round December 2007, where 7 areas were offered & EPSA agreements were signed with 6 international oil companies.

www.themegallery.com

LOGO

Introduction
National Oil Corporation

Organized To

CENTERS CONCESS & ION INSTTITU TES

EPSA

JOINT VENTUR ES

Full OWNE D
www.themegallery.com

LOGO

Introduction
JOWEF OIL TECHNOLOGY

SIRTE OIL COMPANY


ARABIAN GULF OIL COMPANY

FULL OWNED
RAS.LANOF OIL & GAS PROCESSING COMPANY

www.themegallery.com

LOGO

Introduction
WAHA OIL COMPANY ENI OIL COMPANY

OXY LIBYA

JOINT VENTURES

ENI GAS COMPANY

REPSOL OIL OPERATION

ZUEITINA OIL COMPANY

www.themegallery.com

LOGO

Introduction
EPSA SHELL COMPANY

WOODSID E

WINTERSH ALL

NATIONAL OIL CORPORATION

TOTAL E & P

PETROCAN ADA

www.themegallery.com

LOGO

History of Libyan oil Agreement


Petroleum agreements in Libya have been changed since the promulgation of Petroleum Law in 1955 up to date, whereas the profits were allotted between the two parties, first party which is Libyan party or Libyan State, and second party , which is foreign companies or foreign party, such agreements have been subdivided into three parties as follows: Deed of Concession, which is tax- royalty agreement Participation Agreement EPSA Exploration Production Sharing Agreement 1. Tax Royalty Agreement Deed of Concession Started to be applied since 1955, until the Revolution of first September 1969, whereas deeds of concession were granted to the companies according to the existing laws that time, in the year 1956, more than 170 deeds of concession have been granted to American, British and Dutch companies, such as Shell, under such deeds 80% of Libyan oil reserve has been explored during such period of time of 1960s, most of the giant fields have been explored during that period of time.
www.themegallery.com

LOGO

History of Libyan oil Agreement


It is well known that capacity of fields shall be subdivided as follows: Capacity > 10 Billion (STB) 1 10 Billion (STB) 0.2 1 Billion (STB) 50 MM 200 MM (STB) < 50 MM (STB) Name Super giant Giant field Large field

Medium field Small field

www.themegallery.com

LOGO

History of Libyan oil Agreement


Most important elements of deeds of concession: Deed Term 50 years, the deed stipulates that the second party shall have full authorities and responsibility for administrative, financial and technical aspects of the fields, which are represented in exploration, prospecting, evaluation, setting up fields development plan, setting up downstream and upstream policy, pipelines construction, terminals construction, marketingetc, the Libyan party shall have no relation to such matters and never be involved unless in terms of any contradiction to the laws it may takes place. Libyan State collects title royalty and gradually it becomes under the name of the right of State ownership Royalty and tax value has been gradually changed, whereas before the Great Alfateh Revolution i.e. during the kingdom era, 1/8 which is about 12.5% of the production was possessed by the Libyan Government, oil price was determined by the Libyan party.
www.themegallery.com

LOGO

History of Libyan oil Agreement


disregard the economic feasibility of foreign party, the remaining production which is 7/8 from which production and operation is deducted, the remaining portion is profit, which is allotted equally between the two parties, whereas the Libyan party Libyan Government portion is represented in 50% of the profit, the remaining is 50% of profit for the foreign party, after the declaration of the Great Alfateh Revolution namely 04/09/1970, first anniversary of the revolution, Libya took a decision to increase the tax from 50% to 55% of the profit, thereafter, in April 1971, Libya held negotiation meeting with foreign international companies, on behalf or by power of attorney from State of Kuwait, Saudi Arabia, Algeria and Iraq to increase the tax from 55% to 60%, thereafter, namely after October war 1974, the royalty has been changed to become 1/6 of the production, i.e. about 16.67% of the production, the tax became 65% of the profit. Libyan party determines the oil price, but there was two oil prices: selling price and posted price, whereas the posted price was previously before the revolution determined by the Minister of Petroleum, also some political pressures and interests involved therein.
www.themegallery.com

LOGO

History of Libyan oil Agreement


2- Participation Agreement, based on keeping the royalty and tax: Since the revolution, and cease of rapid depletion of oil which Libya suffered before the revolution, Libya became third exporter State of oil in the world, the circumstances became The conditions exist to retrieve the state of their powers and control over their resources and oil and to regain what was taken from, thanks to the revolution and wise leadership, an express plan for the rationalization of resources has been set up, to be invested by the State for the optimal investment, the following has been implemented: Right of producer State to control and dispose of its resources in the fair way Increasing of oil prices to reach its true and appropriate value. Cease of rapid depletion of the oil, and to be invested fairly Redrafting the previous agreements, to suit the powers of Producer State, in terms of financial, administrative and technical control of its resources. Establishment of an entity to share with second party in controlling of oil fields, which is national oil corporation
www.themegallery.com

LOGO

History of Libyan oil Agreement


Most significant elements of the agreement: Half of the product shall be for Libyan party, 50% 1/2 of the production for Libyan State Participation of Libyan party with foreign party in expenses, shall have the right to manage the projects and to involve local services companies exploration and maintenance shall be equally paid 50% of each party Foreign party shall pay royalty and tax for its portion of production keeping of tax and royalty Most of the companies have accepted this agreement, except British Petroleum and Shell Company, both companies have been nationalized, the first became under the name of AGOCO Arab Gulf Oil Company, the second SOC Sirte Oil Company, among such companies which have accepted the agreement are Amanda Company with 8.16% of its portion of profit and Camco Company with 16.3% of its portion of profit.

www.themegallery.com

LOGO

History of Libyan oil Agreement


3- Exploration Production Sharing Agreement EPSA This new type of agreements has emerged during 1970s, namely in 1974, after the important revolution in oil industry which took place in Libya, and after the State regained its role and power of its oil, the foreign party represented in international foreign companies did not like it, so they have created other type of agreements, which is EPSA agreement, attempting to increase its portion of profit, and actually succeeded in doing the same. It was clear through EPSA1 which emerged in 1974, then EPSA2 in 1983, thereafter EPSA3 in the beginning of 1990s, but recently, namely in 2008 EPSA4 has emerged, here the role of NOC has been clearly emerged, whereas readjusted the previous agreement as follows: Deed or agreement term EPSA4 to be 25 years. Foreign party shall be committed to pay exploration expenses which are determined by the NOC, such value is determined since the beginning, for instance:

www.themegallery.com

LOGO

History of Libyan oil Agreement


The NOC imposed on certain foreign company X 40 MM$ to drill and explore two wells, the company started to drill the first well with cost of 25 MM$ for example, but it does not discovered any oil, it shall be obliged to pay the amount to NOC, which is 15 MM$, this is express privilege for NOC, such value called minimum exploration system Determined duration for exploration and prospecting is 5 five years, development expenses to be paid equally 50% by each party Reduce of net profit of foreign companies up to a proportion ranging between 2-4%, which is significant privilege and success for NOC. Second foreign party shall be committed to pay signature bonus to the first Libyan party at signature of deed or agreement, as well as shall be committed to pay production bonus which is non refundable. This true sharing in profits of foreign party has been imposed on all companies, except 3 companies which: Waha company which still working by fixed net profit participation agreement, Winter shell and Total E&P have refused EPSA4, they still follow the old system.
www.themegallery.com

LOGO

Diagram
1st Party 2nd Party
isSignature a Desi

Bonus

Minimum Exploration Commitment (100 % ) Development (50 % ) Operating Costs (100 - S) % First Income of Party=Production(100MS) % 1st Second Party NCF Calculations
EPSA 3 & 4

Development (50 % ) Operating Costs (S % ) Cost Oil = Production(MS) % Cost Oil Expenditures Profit oil= Cost oil Year expenditures

NO

Second Income of 1stParty=Profit oil *(1- A*B)

Take all Cost oil

Production Bonus

NCF 2= Profit oil *A*B www.themegallery.com

LOGO1st party

2nd party
Signature Bonus Minimum Exploration Commitment (100%)

Development (50%) Operating Costs (100 S)% First Income of First Party= Production*(100 S)%

Development (50%) Operating costs (S%) Cost Oil= Production*S% Cost Oil Expenditures YES Year Expenditures NO Take all Cost Oil

2nd Income of 1st Party= Profit Oil*(1-A*B) Production Bonus

Profit Oil=Year cost oil Year Expenditures


NCF2= Profit Oil * A * B

LOGO

Profit Factor and Production Factor


Profit Factor "A"
0.9 0.8

"A" Factor

0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 0 1 2 3 4 5 6

"R" Factor

Production Factor "B"


1.2

"B" Factor

1 0.8 0.6

0.4
0.2 0 0 20 40 60 80 100 120

Daily production rate, MB/D


www.themegallery.com

LOGO

EPSA 3 Model & Example

Exploration and Production Sharing Agreement (EPSA 3)

The Fiscal Terms Between National Oil Company and E&P Companies in Libya

www.themegallery.com

LOGO

EPSA 3 Model & Example


a) Sharing Petroleum Production 1. Allocation of Crude Oil Crude Oil produced under this Agreement from each Area of contract Area shall be allocated to the parties as follows: 1st Party % of production from such Area allocated to the first party The remaining % of production from such Area allocated to second Party until the cumulative value of Crude Oil produced from such Area equals the cumulative Petroleum Operations Expenditures incurred by second Party in respect of such Area (as we call it Cost Oil). The remaining Crude Oil is referred to the Net Crude Oil (as we call it Profit Oil) 2. Calculate the Cost Oil Cost Oil = Current Year expenditure / Official Selling Price
www.themegallery.com

LOGO

EPSA 3 Model & Example


3. Calculate Net Crude Oil (Profit Oil) to the 2nd Party Net Crude Oil = 2nd Party share * Average Annual Production Cost Oil 2nd Party Share of Net Crude Oil (Profit Oil) = Base Factor * A Factor * Net Crude Oil Where: Base Factor is a portion of daily production from the Area. The following table contain the proposed values (not officially)
Average daily production (b/d) Base Factor

1 10000
10,001 25,000

1
0.8

25,001 50,000
50,001 75,000 More than 75,000

0.6
0.4 0.2
www.themegallery.com

LOGO

EPSA 3 Model & Example


The A Factor indicates the ration of the Cumulative values of Crude Oil received by the Second Party from production in such Area over the Cumulative Petroleum Operations Expenditures incurred by the 2nd Party. Ratio = Cumulative Revenue from Crude Oil / Cumulative Cost The following table shows the proposed values of A Factor
Ratio < 1.0 1 to or equal 1.5 1.5 to or equal 3.0 3.0 to or equal 4.0 More than 4.0 A Factor 1 0.8 0.6 0.4 0.2

www.themegallery.com

LOGO

EPSA 3 Model & Example


The remaining Net Crude Oil shall be allocated to the 1st Party (NOC). 1st Party share of Net Crude Oil= Net Crude Oil 2nd Party share of Net Crude Oil The following table summarizes the shares of each Party:
1st Party Share (NOC) 1st Party share of Crude Oil The remaining Share of Net Crude Oil 2nd Party Share (E&P company) Cost Oil 2nd Party share of Net Crude Oil

www.themegallery.com

LOGO

EPSA 3 Model & Example


b) Rents, Royalties and Taxes Royalties and Taxes 2nd Party shall not pay liable for royalties and taxes imposed by the petroleum law and Income Tax Law on the income realized from its share of petroleum under this Agreement. Custom duties 2nd Party shall be subject to custom duties according to the Petroleum Law. Rentals and Fees 2nd Party shall be exempt from payment of rentals and fees relative to the contract area Other Incomes For the purpose of determining Libyan taxes and other Libyan Governmental charges due from 2nd Party, 2nd Party should not be allowed to charge costs incurred under this agreement against income realize under other agreement; nor shall income this Agreement be consolidate with income from other activities.
www.themegallery.com

LOGO

EPSA 3 Model & Example


c) Costs and Expenses
Costs and Expenses of Petroleum operations: 1. All costs, expenses and liabilities incurred for Exploration Operations and Appraisal borne by 2nd Party. 2. Development Expenditures and Exploration Capital Expenditures between the Parties, 50 % by 1st t Party and 50 % by 2nd Party. 3. Explorations Operating Expenditures shared between two parties with agreed percentage in negotiation phase. 4. Costs, expenses incurred for Petroleum Operations, shared between with agreed percentage in negotiation phase. Head office Overhead Charges:(by the company to the Operator) 1. The allocation method for such overhead charges according to the general accepted accounting principles 2. Such charges do not exceeds two percent (2%) of the annual Petroleum Expenditures of the Operator. 3. Such charges dont in any Calendar Year exceed the sum of () $.
www.themegallery.com

LOGO

EPSA 3 Model & Example


d) Make-up of Under Lifting:
Lifting: Each Party have the right and obligation to take kind and separately sell or other dispose of its total share of Crude Oil. After the Commercial Discovery has been declared by the Management Committee. Underlifting: In the event of that during any giving period the quantity of Crude Oil off taken by any party is less than the quantity of Crude Oil such party referred to Under lifting Party is entitled to off take the differences between such quantities being referred to shortfall". The amount of the shortfall exceeds five hundred thousand(500,000) barrels, then the Underlifting Party make up such shortfall by offtaking over and above its share of Crude Oil produced, ten percent (10%) of such shortfall per month during each succeeding ten(10) months out of the other partys share of Crude Oil produced, provided, however, that party should not be suffer under this provision a reduction of its share of Crude Oil produced in such month exceeding (20 %) of such share.
www.themegallery.com

LOGO

EPSA 3 Model & Example


EXAMPLE PROBLEM Economic Evaluation of UNIV F0708 applying EPSA 3&4 Given the following information about the new discovery UNIV F0780: Calculate the NCF -1 and NCF -2 in the year 2008
Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Average Q during the year ( B/D ) 0 0 0 0 0 0 25,000 41,000 41,000 38,500 CAPEX ( MM$ ) 5 15 32 55 130 125 45 15 0 0 0 Assume: Cv = 3 $/B Cf = 12 MM$/year Oil Price = 60 $/B 2nd Party Shear = 15% Use the A & B step Function of the 2005 EPSA-3&4 new agreement. Assume Exponential decline Starts from 1/1/2007.
www.themegallery.com

LOGO

EPSA 3 Model & Example


UNIV F0780 Total Investment

www.themegallery.com

LOGO

EPSA 3 Model & Example


50 45 40 35 30 25 20 15 10 5 0 5 10 15 20 25 30 35 40 45 50 Operating Cost

www.themegallery.com

LOGO

EPSA 3 Model & Example


ECONOMIC EVALUATION OF PROJUCT UNIV F0780 EPSA 3&4 Summary of Input Cumulative Production Oil Condensate Gas Gas Sales Cumulative Expenditure Previous Expenditure Capital Investment Operating Cost

152 MM STB 0 MMSTB 0 MMSCF 0 MMSCF 0 MM$ 422 MM$ 865 MM$

www.themegallery.com

LOGO

EPSA 3 Model & Example


Selling Prices Oil Price Condensate Price Gas Price Sharing Capital Expenditure (%) Operating Cost (%) Production (%) Seismic & Exploration (%) Allocated Cost Oil (%) 60 $/STB 0$/STB 0$/MMscf 1 st Party 50 85 85 85 85 2 nd Party 50 15 15 15 15

Evaluation Results

www.themegallery.com

LOGO

EPSA 3 Model & Example


Project Government NOC 2nd Party

Gross Revenue (MM$) Signature & Production Bonus (MM$) Exploration + Appraisal Costs (MM$) Development Costs (MM$) Operating Cost (MM$) Net Profit (MM$) Present Value, Net PV (10%), MM$ Present Value, Net PV (5%), MM$ Rate Of Return (ROR %) Profit to Investment Ratio, PIR, ($/$)

9,137

5,636 0

2,536 0

965 0

0 422 865 7,850

0 0 0 5,636 1,636 2,904 --------

0 211 735 1590 456 820 54,8 %

0 211 130 625 139 290 26.8 %

--------

1.68

2.96
www.themegallery.com

LOGO

EPSA 3 Model & Example


Distribution of Revenues Bonuses ($/B) Exploration + Appraisal ($/B) Development ($/B) Operating ($/B) Net Profit ($/B) Distribution of Crude Oil
Oil Produced (MMB) 152.3 100.0% Expenditure )MMB) 21.4 14.1% NCF(NOC) NCF(2nd Party) (MMB( (MMB) 26.5 17.4% 10.4 6.8% T&R 93.9 61.7% NOC+TR 120.4 79.1%
www.themegallery.com

0.00

0.00

0.00

0.00

0.00

0.00

0.00

2.77

0.00

1.39

1.39

5.68 51.55

0.00 37.01

4.83 10.44

0.85 4.10

LOGO

EPSA 3 Model & Example


nd st st nd

2nd Party 1st Party 1st Party Yearly Operation Yearly Operation Yearly Yearly Yearly Costs Total Costs Costs 2 Party 1 Party 1 Party Yearly Operation Yearly Operation Yearly Yearly Yearly Costs Total Costs Investment Investment Opex Cost Variable ($) Investment Investment Opex Cost Variable Fixed Fixed Opex Cost 2nd Party Costs ($) Opex Cost 2 Party Distribution of Revenues (MM$) (MM$) (MM$) ($/B) ($) Total Cost Costs (MM$) (MM$) (MM$) (MM$) ($/B) ($) 0.00 Total Cost0.00Costs 0 0 0 0 0 0 0.00 0 0 Bonuses ($/B) 2.5 2.5 0 0 12 12 0 0 (MM$) 7.5 7.5 0 0 12 12 0 0 0 0 0 16 0 0 0 0 0 0 16 0 12 12 0 0 27.5 27.5 0 0 12 12 0 0 2.5 2.5 0 65 0 0 12 12 0 0 65 0 12 12 0 0 0.00 0.00 0.00 0.00 Exploration + Appraisal ($/B) 00 0 12 12 0 0 12 7.5 7.5 0 62.5 62.5 12 0 0 22.5 22.5 33.46875 27375000 12 2737501 39.375 5.90625 2 16 16 0 7.5 7.5 48.36075 0 44895000 12 4489501 12 12 0 0 56.895 8.53425 2 27.5 27.5 0 0 0 12 56.895 8.5342512 0 0 0 48.36075 44895000 2.77 12 4489501 0.00 1.39 1.39 2 Development ($/B) 65 65 0 0 0 42157500 12 4215751 12 54.1575 8.12362512 0 0 0 46.033875 2 0 41.6655619 12 3701832 49.018308 7.352746 62.5 62.5 0 0 0 37018308.1 12 12 0 0 1 3 0 1 22 0 0 37.8297661 32505607.2 12 3250561 44.505607 6.675841 22.5 22.5 33.46875 27375000 12 27375012 39.375 5.90625 4 3 9 2 08 0 0 34.4615714 28543025.1 12 2854303 40.543025 6.081453 Operating ($/B) 7.5 7.5 48.36075 44895000 12 44895012 56.8950.85 8.53425 1 9 7 0.00 2 78 5.68 4.83 0 0 31.503975 25063500 12 2506351 37.0635 5.559525 2 0 0 48.36075 44895000 12 44895012 56.895 8.53425 0 0 28.9069231 22008144.8 12 2200815 34.008144 5.101221 1 3 7 8 73 0 0 46.033875 42157500 12 42157512 54.1575 8.123625 0 0 26.6264637 19325251.4 12 1932526 31.325251 4.698787 51.55 10.44 4.10 1 2 3 37.01 4 71 Net Profit ($/B) 0 0 41.66556191 37018308.13 12 28.969414 37018320 49.0183081 7.35274622 0 0 24.6240027 16969414.9 12 1696942 4.345412 3 7 7 9 25 0 0 22.8656508 14900765.7 12 1490077 26.900765 32505619 4.035114 0 0 37.82976614 32505607.23 12 44.5056072 6.67584108 9 5 8 7 86 0 0 21.3216501 13084294.3 12 1308430 25.084294 3.762644 0 0 of Crude 34.46157141 28543025.19 12 28543037 40.5430252 6.08145378 8 3 6 3 15 Distribution Oil 0 0 19.9658702 11489259.0 12 1148927 23.489259 3.523388 0 0 31.503975 25063500 12 25063512 37.0635 5.559525 1 6 1 1 86 nd 0 NCF(NOC) 0 18.7753660 10088665.8 12 1008867 22.088665 3.313299 Oil0Produced 0 Expenditure NCF(2 Party) T&R NOC+TR 1 9 8 9 88 28.90692311 22008144.83 12 22008157 34.0081448 5.10122173 (MMB) ) MMB) (MMB ( (MMB) 0 0 26.62646371 19325251.42 12 19325263 31.3252514 4.69878771 152.3 21.4 26.516969414.97 10.4 93.9 120.4 0 0 24.62400273 12 16969427 28.9694149 4.34541225 0 0 22.86565089 14900765.75 12 14900778 26.9007657 4.03511486 100.0% 14.1% 17.4% 6.8% 61.7% 79.1% 0 0 21.32165018 13084294.33 12 13084306 25.0842943 3.76264415 0 0 19.96587021 11489259.06 12 11489271 23.4892591 3.52338886 www.themegallery.com 0 0 18.77536601 10088665.89 12 10088678 22.0886659 3.31329988

LOGO
Allocated 1st Income Cost Oil to 1st Party (MM$) (MM$)

EPSA 3 Model & Example


SUM Cost oil ---------------1st Party sum Expenditure Profit oil Gross Ratio Shared with Income 1st (MM$) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 465.375 0.39218027 0 0 763.215 0.96171717 0 0 763.215 1.50227749 126 88 716.6775 1.97426976 118 84 629.31124 2.36127391 104 55 552.595323 2.680464563 91 51 485.231428 2.94486475 80 46 426.0795 3.164526785 70 41 374.138462 3.347330445 61 37 328.529274 3.49953591 53 32 288.4800546 3.626175238 47 28 195.3174041 3.731334964 41 24 171.5073201 3.818363716 35 21 0 3.890027167 31 19 0 3.948625378 27 16 2nd Party Profit oil 2nd Party Shared NCF nd with 2 (MM$) -3 0 -8 0 -16 -28 -65 -63 54 119 88 84 55 51 46 41 37 32 28 24 21 19 16 0 0 0 0 465 763 802 751 678 592 519 455 399 350 307 270 237 208 182 Cum Cum NCF- 2 revenue2 -3 -10 0 0

0 0 0 0 0 0 82.125 134.685 134.685 126.4725 111.054924 97.5168217 85.6290756 75.1905 66.0244345 57.9757543 50.9082449 44.7022972 39.2528829 34.4677772 30.2659977

-26 0 -54 0 -119 0 -181 0 -127 82 -9 217 79 313 163 405 218 468 269 525 315 577 355 623 392 665 424 702 452 734 476 762 498 787 516 809 532 829 www.themegallery.com

LOGO

Conclusion Of EPSA
Convention on the Exploration & Sharing production Agreement "EPSA" in the economies of the oil industry contracts that the Organization for this activity changed according to crises in the world markets for this commodity prices and this is what experience has shown historically, therefore, we find as a result of sudden rise in oil prices during the crisis of prices in the first 74-1973, the National Institution for oil on the basis of the powers granted to it by Law No. 24 of 1970 to adopt a new pattern of world oil conventions applicable to countries other productive what is known as the "Convention on the Exploration & Sharing production," "Exploration and Production Sharing Agreement" has been defined "EPSA B-1, "in the year 1974,since then, the National Institution for oil by the introduction of new patterns of these conventions, providing the Convention on second partake "EPSA-2 "1980" during the crisis of the high prices "Second, followed by the Convention on Third partake "EPSA-3" in 1988, and, finally, the Convention on fourth partake "EPSA-4 "in 2005.

www.themegallery.com

LOGO

Conclusion Of EPSA
In all types of these conventions that it had been contracted with foreign companies, as this is different contractual patterns In procedural terms, but, It has the same of all of philosophy and characteristics in terms of financial, technical and legal, they can be summarized as the operational phases are as follows: The exploration phase: abide by the foreign partner, "the second party," Financing of the exploration phase and holds all the risks resulting from which, the duration of exploration between 5 to 7 years. The foreign partner spending on exploration operations of production in the case of found on the discovery of commercial agreements for the first and second partake "EPSA. 1 and 2, in contrast to the conventions of the third and fourth partake "EPSA-3 and 4", which recovered in the second party its expenses on the operations of exploration, development and production in the case of found on the discovery of trading. The development stage: In the case of the achievement of the discovery of oil trading contribute the national institution in capital expenses "," CAPEX as a share in the rate of production
www.themegallery.com

LOGO

Conclusion Of EPSA
is the contribution of the institution agreed a loan-based foreign partner to a specific time period or, when an investigation or access to a certain amount of production for belonging to share with first "1 "EPSA conventions partake in the second, third and fourth .2, 3 and 4-EPSA" by the Foundation national oil financing for development operations, which are estimated at 50% is almost non-recoverable expenses, and with respect to the foreign partner, its expenses developmental recoverable at the start of production processes in accordance with the model III and IV of the Convention and partake "3 4 EPSA "does not include this requirement and the second of the first model conventions partake "1 and 2 EPSA. " The production stage: each of the Parties to pay its obligations of the first and second operational expenses "OPEX" both as its share of production agreed in advance for the agreements of the first and second partake "EPSA.1and2.In the third and fourth partake conventions "and 4,3" EPSA contribute each of the national institution foreign oil and partner in the financing of operational expenses to the extent their respective share of them in production, production are partake in proportion to allocate an initial agreed oil of the national institution the remainder of the production allocated to the foreign partner "to recover the foreign partner accumulated reimbursable expenses", defines the "oil-cost", "Cost Oil" identified during the direct negotiating process, "One-to-One,
www.themegallery.com

LOGO

Conclusion Of EPSA
Direct Negotiation" in the Conventions partake "3 third "EPSA, either in conventions in fourth conventions partake "4 "EPSA determined by the tender" during the rounds of the general declaration ", to equal the accrued value of the share" oil-cost "with accumulated operations expenses incurred by the foreign partner, including its share of the oil operations expenses" exploratory and development and operational "in that year deducted the value of crude the recipient of the foreign partner, according to the official price for raw materials after Libyan that distributes the surplus" oil, the "profit" Profit Oil "or sometimes called net oil" Net Oil ", according to an equation that take into account several scenarios and facts essential such as the changing in oil prices on world markets and expenses cumulative capital operational expenses, as well as quantities and rates of production, the variables of the equation to be determined by the National Institution for each region Oil contract basis, taking into account technical factors and the possibility of geological and presence of the region. The mechanism of that equation is provided for in article "12 "of the Convention partake fourth to be on the basis of the distribution of surplus" oil, the "profit" Profit Oil "or net oil" Net Oil ", this equation as following:

NCF2 = Profit Oil * A factor * B factor

www.themegallery.com

www.themegallery.com

LOGO