Kuwait Energy
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Annual payments for Block 43:
o
Training Fee of US$0.15 MM;
o
Institutional Bonus of US$0.15 MM; and
o
Social Development Bonus of US$0.15 MM.
Income Tax: the contractor’s income tax in Yemen is borne by the Ministry of
Oil and Mineral Resources.
7.3.3 Oman
The relevant elements of KSF Service Agreement are:
Cost Recovery Fee: Limited to 30% of the revenue; and
Profit Share Fee:
Remaining revenue (after deducting Cost Recovery
Fee) is allocated 3.98% to the Contractor group and 96.02% to PDO.
Corporate tax of 12% is applied to the Contractor’s revenue less costs.
7.3.4 Iraq: Siba and Mansuriya
The applicable fiscal regimes for Siba and Mansuriya are defined in their
respective GDPSCs. In both cases, the Contractor’s revenue is made up of Cost
Recovery and Remuneration Fees.
The Cost Recovery and Remuneration Fees are derived from a “Deemed
Revenue” 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
Contract. This price is related to the Oil Sales Prices (OSPs) published by the
State Oil Marketing Organization of Iraq (SOMO) (see Section 7.1.2).
Costs are divided into Petroleum Costs and Supplementary Costs. Petroleum
costs are fully recoverable within the limit of 50% of the Deemed Revenue in any
Quarterly accounting period and are carried forward until recovered when this limit
is exceeded. Supplementary Costs are fully recoverable within the limit of 60% of
the Deemed Revenue less any Petroleum Costs recovered and Remuneration
Fee paid.
The Remuneration Fee is paid from the same 50% of the Deemed Revenue as
Petroleum Costs are recovered, with costs deemed to be recovered first. Any
unpaid Fees are carried forward until sufficient Deemed Revenue is available.
The Fee is paid for each boe of dry gas or condensate produced, according to the
sliding scale shown in Table 7.4. The R-factor is the ratio of cumulative
Contractor revenue to cumulative Contractor expenditures.
The Remuneration Fee is additionally multiplied by a performance factor during
the required plateau production period (9 years in the case of Siba, 13 years for
Mansuriya) if the actual dry gas production rate fails to attain the required plateau
production rate. The performance factor is then the ratio of net dry gas production
rate to the required plateau production rate.
