Kuwait Energy
EL-12-211107
100
shown in Table 7.5. The R-factor is the ratio of cumulative Contractor revenue to
cumulative Contractor expenditures, the latter including Training Fund
contributions and the signature bonus of US$25 MM.
TABLE 7.5
REMUNERATION FEE, BLOCK 9, IRAQ
R-Factor
Remuneration Fee
(US$/boe)
Less than 1.0
6.240
1.0 - 1.5
4.992
1.5 - 2.0
3.744
2.0 - 2.5
2.496
2.5 and above
1.248
The Contractor Group is required to contribute a non-recoverable amount of
US$1 MM annually to the Training, Technology and Scholarship Fund.
Iraqi corporate income tax is payable at 35% on Remuneration.
7.4
Sensitivity of Reference NPVs to Discount Rate
Reference Post-Tax NPVs attributed to the Proved, the Proved plus Probable and the
Proved plus Probable plus Possible Reserves cases, at discount rates of 7.5%, 10.0%
and 12.5%, are presented in Table 7.6. Discounting has been done on a mid-year basis
to 31
st
May, 2014. Corresponding NPV estimates for the KSF Service Agreement for
each oil production case are shown in Table 7.7. The NPVs at 10% discount rate are the
same as those shown in Tables 0.7 and 0.8.
7.5
Sensitivities to Costs and Commodity Prices
The sensitivity to variation in costs and commodity prices of the reference Post-Tax NPVs
attributed to the Proved plus Probable Reserves cases, at a discount rate of 10.0%, have
been evaluated. Specifically, in the first instance, the reference oil prices (Table 7.1)
have been varied by ±20% (gas price at Abu Sennan has not been varied since it is fixed
by the contract; deemed gas price at Siba and Mansuriya is linked directly to the oil price,
as discussed in Section 7.1.2). Secondly, the future CAPEX for each field has been
varied by ±20%. Thirdly, the future OPEX for each field has been varied by ±20%.
Results of these sensitivities are presented in Table 7.8. Corresponding sensitivities of
the NPV
10
estimates for the KSF Service Agreement for the “best estimate” oil production
case are shown in Table 7.9. As before, discounting has been done on a mid-year basis
to 31
st
May, 2014. The base NPV
10
in Tables 7.8 and 7.9 is the same as that shown in
Tables 0.7 and 0.8.
