Kuwait Energy
EL-12-211107
93
TABLE 7.2
ADJUSTMENTS TO REFERENCE OIL PRICE BY FIELD
Field
Adjustment
Block 5 (Yemen)
-2.0%
Nabrajah
0%
Burg El Arab
-2.0%
Abu Sennan
-4.0%
ERQ
-2.0%
Area A
-9.0%
Notes:
1.
For KSF (Oman) and fields in Iraq, see Sections 7.1.1 and 7.1.2 respectively.
7.1.1 KSF (Oman)
In Oman, contractor revenue at KSF is based on the “Effective Revenue”, which is
equal to the KSF oil production (in barrels) times the Oman Ministry of Oil and Gas
(MOG) published selling price per barrel for Oman Blend crude oil. Over the past
year, there has been only a narrow differential between the MOG published price
and Brent prices, so equality between the two has been assumed from 2014
onwards.
7.1.2 Fields in Iraq
For the Siba and Mansuriya gas fields, the starting point for calculating the
Contractor’s revenue is a “Deemed Revenue” (see Section 7.3.4). This is
calculated by converting the produced gas and condensate volumes into oil
equivalent volumes (using conversation factors of 6.0 Mscf/boe and 1.0 Bbl/boe
respectively) and multiplying by a price per boe defined by the Service Contracts.
This price is related to the Oil Sales Prices (OSPs) published by the State Oil
Marketing Organization of Iraq (SOMO). To arrive at a SOMO OSP scenario, a
5.5% discount to Brent has been applied (Table 7.3). This effectively prices the
gas and condensate as shown in the right-hand columns of Table 7.3. It may be
noted that the deemed gas price specified in the GDPSCs is significantly higher
than prevailing gas prices in the Middle East region.
For Block 9, “Deemed Revenue” is calculated in the same way, except that the
gas price used is only half of the SOMO OSP on a per boe basis.
