VIII Seminário Internacional Britcham de Energia sobre Desafios do Pré-Sal Gaffney, Cline & Associates C Desafios do Pré-Sal 26 de Novembro, 2008 Rio de Janeiro
VIII Seminário Internacional Britcham de Energia sobre
Desafios do Pré-Sal
Gaffney, Cline & AssociatesC
Desafios do Pré-Sal
26 de Novembro, 2008
Rio de Janeiro
"Aspectos Regulatórios:Qual a Estrutura Apropriada para o
Pré-Sal?"
Gaffney, Cline & AssociatesC
Pré-Sal?"
Objetivo: Compreender a estrutura regulatória proposta para a área do pré-sal e seu impacto para investidores potenciais
Especificamente: Os aspectos da eqüidade entre os participantes de um campo
Potential Contractual Outcomes..
• Pre-Sal fairway remains under Concession Agreement terms, but – SPT increased dramatically
• Unlicensed Pre-Sal fairway is subject to a Production Sharing Agreement
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Production Sharing Agreement– with/without “Petrosal” carry
• Unlicensed Pre-Sal fairway subject to Service Contract – with/without “Petrosal”
• Some form of hybrid?
Whatever the Contractual Outcome..
• Unitisation & Redetermination will become an issue…no precedents at this scale in Brazil
• Appraisal & development drilling will
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• Appraisal & development drilling will continue on existing discoveries
• Exploration will continue on licensed acreage
• Unless Petroleum Law stays unchanged, development delays will occur
Bem-te-vi
*
*
Carioca, Guará
Parati
Tupi, lara
Pre-Salt Licence Groups & Equity Interests
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* Caramba
Jupiter
* Pâo de Açucar
Why Unitise?
To ensure that the State's resources are developed in an optimum and efficient manner
– To maximise recovery from the field as a
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– To maximise recovery from the field as a whole
– To share and make best use of all relevant technical information
– To reduce development costs and improve the efficiency of the project
What is Unitisation?
Licence A Licence B
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Unitisation is the process by which development of a field that crosses one or more Licence (or International) boundary or
boundaries can take place as a single "unit"
Overriding Principles
• Unitisation• Permits the joint development of a
hydrocarbon resource that straddles territory controlled by different organisations
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organisations
• Required where there is unequivocal evidence of cross-boundary reservoir connectivity
• Prevents one licensee from taking the hydrocarbons that belong to another
Continued Pre-Sal Licensing
• Pre-Unit Agreements may be useful
• Unitisation & Unit Operating Agreements (UUOAs) will be required
• Issues include:-
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• Issues include:-– Unit Area & Unit Reservoir
– Unit Operator(s)
– Basis for Unitisation
– Need, timing & number of Redetermination(s)
– Past Costs & Future Revenues
When to Unitise, when/if to Redetermine?
Discovery
Appraisal
Development Plan
Pre-Unitisation Agreement
Unitisation and Unit
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Field development
Field abandonment
Development Plan
Production
Unitisation and UnitOperating Agreement
Redetermination
Unitisation – e.g. CAs and/or PSCs
Licence A Licence B
Company A
WI%40
UI%34.0
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Unit Area
15%
85%
Company ACompany BCompany C
WI%503020
UI%7.54.53.0
Company ACompany D
4060
34.051.0
WI% = Working Interest in LicenceUI% = Unit Interest in the Field
Redetermination – e.g. PSC & CA
Licence APSC
Licence BCA
Company A
WI%40
UI%32.0
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Unit Area
20%
80%
Company ACompany BCompany C
WI%503020
UI%10.06.04.0
Company ACompany D
4060
32.048.0
WI% = Working Interest in LicenceUI% = Unit Interest in the Field
What is a Redetermination?
A new determination of Tract Participations
– Updated estimate based on new data
– Almost always retroactive
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– Almost always retroactive
– Often highly contentious
– Adjustments may not be "fair and equitable"
– May be very expensive
Redetermination
• Timing– End of Development drilling?
– 9 months after production start-up?
– Two or more, but not too late..
• Effect
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• Effect– ‘Immediate’ re-imbursement of overpaid costs (Capex
only) from under-paying Tract Participants
– Deferred production of under-lifted petroleum
• Changes in commodity price & CAPEX can cancel-out Tract changes
Unitisations that include different contractual bases
• International Borders– Border agreed and field unitised to reflect different
contractual and sovereign rights
– Statfjord field example
– Frigg field standard reference
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– Frigg field standard reference
• Joint Development Areas– Border or borders not agreed and JDA formed to defer
the problem
– Where CA & PSC, latter or hybrid has prevailed
– Examples include Malaysia-Thailand, Australia-Timor Leste
Unitisation of a Pre-Sal Giant
• Development drilling in CA complete, accrued costs ~ US$700MM (10 wells)
• TLD underway, phased development planned, FPSO under construction
• Unitisation on basis of in-place, moveable,
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• Unitisation on basis of in-place, moveable, reserves or a hybrid
• “New Tract Participants” have had no influence, but must: – contribute their proportion of Tract’s past costs immediately
– or reach an alternative commercial arrangement….
– after proving continuity!
Redetermination of a Pre-Sal Giant
• Production from TLD and 1st Phase, after say 12-18 months
• Redetermination on basis of in-place, moveable, reserves or a hybrid
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reserves or a hybrid
• If PSC Tract increases:
– ‘Immediate’ payment of past costs, that will be recouped
from in-kind lifting of ‘cost oil’
– Plus an additional production quota to make up, over an
agreed period
• If CA Tract increases – same, but no ‘cost oil’