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W3V18 EP Conclusion V2016 Handout
W3V18 EP Conclusion V2016 Handout
W3V18 EP Conclusion V2016 Handout
Jean-Claude Heidmann
These are organized by each country’s authorities, based on the local Hydrocarbon or
Mining Law.
The two most common contracts today are the Concessions and the so-called “Production
Sharing Contract” or “PSC”.
They define, for example, the terms and conditions of the share of production between
partners.
They also specifies the split of cost/investments and the related revenues between the joint
venture partners and the country.
The Joint Operating Agreement – called JOA - is a typical contract, defining rules between
partners, and aims to manage the acreage within the Joint venture. It defines the rules of the
game for the JV partners.
E&P Actors
In countries where a National Oil Company exists, for example Saudi Aramco, Petrobras,
Statoil etc, this NOC acts on behalf of the government in the joint ventures.
The group of International Oil Companies or “IOC” includes big integrated companies called
“Majors” - such as Exxon, Shell, BP, Chevron or Total - but includes also a whole range of
sizes from large Independents to very small individual companies. Their roles vary depending
on their business models.
In addition specialized contractors and service companies contribute to, and work with,
the Joint venture under “service or technical contracts”.
The second type of challenge, is related to the technology and research effort that will be
required to develop more and more complex fields in more and more difficult environments.
And lastly, due to this complexity, E&P activities are more and more capital intensive all
along the cycle.
The next step of the oil and gas chain is the transformation of hydrocarbons. This is the
work of the refining industry and you will learn all about that during the next course.