Part 19

Stabroek News - - REGIONAL NEWS -

Dis­posal of Pro­duc­tion

Re­call that un­der a pro­duc­tion shar­ing con­tract, costs are de­ducted from the value of pro­duc­tion to ar­rive at profit oil to be shared between the con­trac­tor and the Govern­ment of Guyana in the pro­por­tion set out in the con­tract: Ar­ti­cle 11.6. The con­trac­tor is also per­mit­ted to use as much pro­duc­tion as needed in the op­er­a­tions and within the trans­porta­tion and ter­mi­nal sys­tem.

If the reader thinks that the sys­tem is be­com­ing com­pli­cated and there­fore sub­ject to dis­pute, it gets even trick­ier since there may also be some third party us­age of the trans­porta­tion ter­mi­nal sys­tems. Where there is such third party us­age, the quan­ti­ties so used or lost out­side of the con­tract area is pro­por­tion­ate to the ag­gre­gate use of the that sys­tem and the value is ex­cluded from any cal­cu­la­tions un­der Ar­ti­cle 11.

Min­is­ter’s share

The quan­tity of pro­duc­tion to which the Min­is­ter is en­ti­tled is mea­sured and de­liv­ered to the Min­is­ter at the de­liv­ery point, de­fined as the free on board point of ex­port ei­ther on­shore or off­shore as agreed by the Min­is­ter and the con­trac­tor. Ar­ti­cle 11.6 re­ferred to above, is sub­ject to Ar­ti­cle 14 which pro­vides that each party has the right to take its share of the profit oil at the de­liv­ery point and to sep­a­rately dis­pose of its share of the to­tal quan­ti­ties of pro­duc­tion un­der the Agree­ment.

The Agree­ment pro­vides that within twelve months of the ap­proval of a de­vel­op­ment plan or such later date, but no later than three months be­fore the lift­ing of the first sched­uled lift­ing of crude oil, the con­trac­tor may pro­pose to the Min­is­ter off-take pro­ce­dures gov­ern­ing

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