Overview of PSCs Baker McKenzie IBP.Final.pdf

The nigeria psc at clause 8 p 64 provides for

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The next step is a joint management committee. The Nigeria PSC, at clause 8 (p. 64), provides for establishment of a management committee within 30 days from execution of the PSC. The management committee has power to approve by unanimous vote all matters pertaining to Operations. Failing unanimity the parties will: -appoint an expert to give binding advice; or -arbitrate if there is no agreement on an expert.
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38 Contractor / National Oil Company Joint Management China Clause 7 (p.12 ) of the China PSC establishes a Joint Management Committee to ensure proper performance of Operations. A unanimous vote is required failing which the Contractor’s proposal controls.
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39 Contractor / National Oil Company Joint Management Equatorial Guinea Clause 6.2 (p. 18 ) of the Equatorial Guinea PSC provides that the Contractor and the government oil company will enter into an operating agreement based on the latest AIPN model form which will regulate the internal relations of the parties. -The National Company will be the Administrative Operator and -The Contractor is named the Technical Operator.
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40 Regulatory Oversight By The Host Government Governments exercise various degrees of regulatory control over Production Sharing Contracts. One important factor may be the position of the national oil company. Compare, for example, Indonesia and Equatorial Guinea in the discussion that follows.
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41 Regulatory Oversight By The Host Government Indonesia The state enterprise with exclusive “Authority to Mine” is Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (PERTAMINA) and it is authorized by law to enter into Production Sharing Contracts. The Indonesia PSC provides for very little regulatory oversight of the PSC by the government of Indonesia:
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42 Regulatory Oversight By The Host Government Indonesia Clause 1.2.9 : government must approve the PSC. Clause 5.2.5(c) : after the PSC expires, the Contractor must perform site restoration in accordance with governmental regulations Clause 14.2.2 : Pertamina and the government have the right to inspect and audit the books and accounts of the Contractor or require the Contractor’s independent accountants to do so
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43 Regulatory Oversight By The Host Government Nigeria The Nigerian National Petroleum Corporation holds the Oil Prospecting License (OPL) subject of the PSC and any subsequent Oil Mining Lease (OML) from the government. It, in turn, enters into a Production Sharing Contract with third parties. The PSC provides for very limited government intervention in PSC matters:
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44 Regulatory Oversight By The Host Government Nigeria Clause 14.6 (p. 82) : no Nigerian employed under the PSC shall be fired without government approval. Clause 19.5 (p. 89) : Contractor shall submit to government all filings to be made with the government. Annex D, Clause 5.7 : tankers must conform to standards adopted by governmental authority.
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45 Regulatory Oversight By The Host Government China The state oil company under the China PSC has the exclusive right to explore and produce hydrocarbons in cooperation with foreign enterprises in areas approved by the government.
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