Kuwait Energy
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TABLE 7.4
REMUNERATION FEE, SIBA AND MANSURIYA FIELDS, IRAQ
R-Factor
Remuneration Fee
(US$/boe)
Siba
Mansuriya
Below 1.0
7.50
7.00
1.0 - 1.25
6.00
5.60
1.25 - 1.5
4.50
4.20
1.5 - 2.0
3.75
3.50
2.0 and above
2.25
2.10
A state partner holds a 25% participating interest in the Contractor Group for both
fields. The state partner is carried on both CAPEX and OPEX by the other
Contractor parties, who are entitled to a proportionate share of the Cost Recovery
that would otherwise have gone to the state partner. The state partner receives its
participating share of the Remuneration Fees.
Training fund: the Contractor group is required to contribute a non-recoverable
amount of US$1 MM annually for training purposes.
Iraqi corporate income tax is payable at 35% on the Remuneration Fees when
paid.
KE’s Net Entitlement is made up of KE’s share of the Cost Recovery and
Remuneration Fees. These are cash payments (although the Ministry has the
option to pay with oil). However, GCA considers that KE will be entitled to claim
Reserves and/or Contingent Resources because of its exposure to capital at risk
(the GDPSCs are “Risked Service Contracts” (RSCs) as defined by the SPE
PRMS).
Volumes are estimated here by converting KE’s Net Entitlement from US$ into oil
equivalent volumes (boe), using the prevailing SOMO OSP. Since the produced
fluids are gas and condensate, these oil equivalent volumes are reported in
proportion to the prevailing CGR.
7.3.5 Iraq: Block 9
The applicable fiscal regime for Block 9 is defined in the EDPSC. The
Contractor’s revenue is made up of recovery of Petroleum Costs and
Remuneration.
The Petroleum Costs are recoverable quarterly within 50% of the “Deemed
Revenue”, which is calculated as the net oil production (including any NGLs) times
the SOMO OSP (see Section 7.1.2) plus the net dry gas production in boe times
half the SOMO OSP. Unrecovered costs, including all exploration, appraisal and
development costs prior to the start of production, are carried forward to the next
quarter.
Remuneration is limited to 30% of the difference between the Deemed Revenue
and the Petroleum Costs recovered, and is paid for each boe of oil, NGL or dry
gas produced above those used for cost recovery, according to the sliding scale
