Permits

AUSTRALIAN EXPLORATION PERMITS

Australian petroleum exploration permits are initially issued for six years. Under the terms of each permit, the exploration work obligations nominated for the first three years must be met. The permit holder may withdraw from the permit at the end of the third permit year, or at the end of any subsequent permit year, provided all the exploration work obligations up to the date of withdrawal have been met.

An individual permit year may be extended beyond 12 months if circumstances arise where the relevant work obligation for that year cannot be met in time. In such circumstances, the final expiry date of the permit may also be extended, normally by the same period of time.

Provided all work obligations are carried out during the initial term of a permit, it may be renewed for a further 5-year term upon relinquishment of 50% of the original permit area. This renewal is again available to the permit holder at the end of the first 5-year renewed permit term, with the same requirement to relinquish 50% of the already reduced area. Any Retention Lease or Production License that is granted in relation to a discovery within a permit is excluded from the calculation of the relinquishment areas. Therefore, subject to the prescribed requirements, a permit can have a potential 16-year life, or longer if one or more individual permit years has been extended.

AUSTRALIAN RETENTION LEASE PERMITS

Australian retention lease permits are designed to protect the interests of the permit holder of a permit where production is likely to become commercially viable within 15 years, Retention leases are initially issued for five years and may be renewed twice for a maximum term of fifteen years. The permit holder may be required to carry out a works program to establish the nature/extent of the resource and/or its commercial feasibility.

 

MALAYSIAN RISK SERVICE CONTRACTS

The Risk Service Contract (RSC) was introduced by PETRONAS in 2011 as a new petroleum arrangement designed with the objective of intensifying upstream Malaysian oil and gas activities and developing smaller, stranded oil and gas resources. The RSC model balances the sharing of risks with fair returns for the development and production of discovered small fields.

Under the terms of the RSC the Contractor is the service provider and Operator of the field while, PETRONAS is the resource owner. Upfront investment of capital is contributed by the Contractor with the Contractor compensated via the reimbursement of costs plus a remuneration fee for services rendered. The remuneration fee is linked to certain key performance indicators including production, schedule and capital costs.

PURSUING NEAR TERM PRODUCTION EXPANDED STRATEGY