Under the auspices of Iraq`s 2005 constitution, the Kurdish parliament passed an oil and gas law in 2007 to support the development of the region`s hydrocarbons. This legal framework supports a fair and transparent investment environment and creates production sharing contracts that offset the risk and return on investments in the Kurdistan Region. The simplicity, transparency and fairness of these treaties have been recognized and praised throughout the global energy community. A report by Dr. Pedro van Meurs, a global expert on oil tax systems, concluded that krg production sharing contracts encourage oil companies to operate optimally and serve Iraq`s national interests better than Iraq`s risk service contracts. The signature bonus, discovery bonus and royalties contribute to the reindeer in the early stages of oil exploration and production. The Department is transparent about the operation of krg`s production sharing contracts. The Department also provided production sharing contracts signed with production and exploration companies. Please click on these links to read them (files are very large and can take up to five minutes to open). This diagram shows how KRG`s production sharing contracts work.
The production-sharing contracts described in Chapter 10 of the Kurdish Oil and Gas Law establish a sliding scale for royalties and profits. There is a standard royalty of 10% of the total oil produced, and entrepreneurs are entitled to a maximum of 40% of the oil produced to offset their costs. The contracts provide for an initial exploration period of five years with the possibility of extending the contracts to seven years. When a discovery is made, a period of 20 years is granted for further development, with other negotiable extensions. NEW YORK, July 27, 2011 (BUSINESS WIRE) — Hess Corporation (NYSE: HES) today announced the signing of Production Sharing Agreements (PSCs) with the African Regional Regional Government of Iraq for its Dinarta and Shakrok exploration blocks in partnership with Petroceltic International PLC. The PsC project is a standard contract for the sharing of oil production that complies with international standards. It was created in reference to other production sharing contracts of countries around the world that are in circumstances similar to those of Kurdistan. This draft takes into account the comments of international experts in oil policy and the comments of potential investors in Kurdish oil resources. Headquartered in New York City, Hess Corporation is an integrated global energy company dedicated to the exploration, production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products. For more information about Hess Corporation, see www.hess.com.
«This expansion into Kurdistan is a strategic adjustment to our global portfolio and offers a significant opportunity to increase our reserves and production,» said Greg Hill, President of Global Exploration and Production at Hess. Hess is the operator and holds a 64% stake and an 80% stake in the blocks, which are located northeast of Erbil and cover a total area of 670 square miles (1,737 square kilometers). Each CFP has an initial three-year exploration period during which the joint venture plans to acquire 2D seismic wells and drill at least one exploration well. Access to legal and regulatory data (more than 10,000 documents) Reindeer is a major concern for most oil-producing countries, especially those in developing countries. Iraq is one of the countries with a long history of reindeer. Kurdistan is the only federal region in Iraq that independently exports oil and uses production sharing contracts (PSCs) without the approval of the federal government. However, the influence of single points of contact on the reindeer has not been discussed in the literature, especially in the context of the Middle East. This paper argues that while CFPs have contributed significantly to the increase in reindeer in the region, they are not the only factor. The paper draws on the findings of interviews with parliamentarians and oil experts in the region to support the arguments put forward.
Due to the complexity, lack of transparency and other aspects of these contracts, significant revenues have accumulated in the hands of influential groups in the Kurdistan Regional Government (KRG). These revenues are used for personal and political purposes rather than for development. The paper concludes with several policy outcomes and implications, including contractual and institutional reforms. States are not the only actors in the face of rennement. .