Fiscal and Contractual Hurdles for Stablishing Asset Sharing Agreements in Offshore Operations

Abstract

The availability of some processing spare capacity in offshore facilities, during its operational life, is an expected event. At some point in time, it is also expected that some fields may share their assets, in order to enhance its economic value. Asset Sharing Agreements are efficient tools for those purposes. However, taxation and fiscal regime in Brazil does not promote a friendly framework for this initiative. This article aims to discuss some key issues that regulatory agents shall address for adequating Brazilian legal framework to international oil industry standards.

Evaluation of Offshore Project Development under Two Fiscal Regime in Indonesia

“…There are many literature mentions the significant potential benefits of cluster schemes development, such as reducing unit operating costs and improve field profitability (Willigers et al, 2010;Santoro et al, 2017), maximizing national economic recovery by deferring assets abandonment (Santoro et al, 2017;Pedroso et al, 2012), unlocking marginal fields development and increase national oil production (Abdul-Salam et al, 2021). However, the development of this cluster scheme have not been widely carried out in recent decades even though technological advances in this area are also increase extensively.…”

An optimisation model for incentivising the development of marginal oil and gas fields amidst increasingly complex ownership patterns: UKCS case study

“…Ullage or spare capacity is commonly available and may be used by third parties subject to the successful negotiation of a tariff and access arrangements (Abul-Failat, 2014). The use of such spare capacity can benefit both the field owner (host field or hub) and the tie-in (satellite) field by reducing unit operating costs and overall field profitability (Santoro et al, 2017;Willigers et al, 2010a;Cross et al 1994). Besides, the host field or hub can earn additional revenues (tariff income) from the satellite producers, thus contributing to maximising economic recovery by deferring abandonment (Santoro et al, 2017;Pedroso et al, 2012;Willigers et al, 2010a;Antia, 1994) ).…”

“…The use of such spare capacity can benefit both the field owner (host field or hub) and the tie-in (satellite) field by reducing unit operating costs and overall field profitability (Santoro et al, 2017;Willigers et al, 2010a;Cross et al 1994). Besides, the host field or hub can earn additional revenues (tariff income) from the satellite producers, thus contributing to maximising economic recovery by deferring abandonment (Santoro et al, 2017;Pedroso et al, 2012;Willigers et al, 2010a;Antia, 1994) ). The value chain was 100% owned by the consortia of international oil companies (IOCs).…”