技術(shù)經(jīng)濟學(xué)英文版.ppt

4 . 3 International Contracts In the last section, we discussed the impact of the contract between the mineral owner and the oil company in the United States. In this section, we concentrate on the application of international contracts on the feasibility of field developments in other countries.,Over the last two decades, the emphasis in petroleum exploration has steadily shifted away from domestic oil industry and towards the international arena. The primary reason for this shift is the fact that more than 82% of the proven reserves lie outside the Western Hemisphere. The majority of the under explored and unexplored sedimentary basins (沉積盆地)of the world lie outside the United States. The probability of finding giant or large oil fields is much higher outside the United States than within the United States.,The probability of finding giant or large oil fields is much higher outside the United States than within the United States. Hydrocarbon finding costs in mature basins of the United States are much higher than many other counties. See Figure 4.1 which compares the finding costs in the United States with many other countries. These technological advantages outside the United States, when coupled with the stringent environmental and other regulations in the United States, make the investments in other countries even more attractive.,Figure 4.1: Hydrocarbon finding costs in the U.S. versus other countries (after Bertagne),This section will discuss various contracts used between the host country and the international oil companies to proceed with the exploration and development of potential hydrocarbon reserves. It is important to remember that the objectives of the host country and the international oil company can differ significantly. Most countries are afraid of exploitation, pollution, loss of national pride, and the repetition of the recent history at the hands of the western civilization. The host countries like to be treated as equal and be part of the development of their own mineral resources so that it will benefit the entire population of the host country.,On the other hand, the international oil companies are afraid of changing tax rules, expropriation(征用) of oil and other assets, nationalization of a private company, and political uncertainties. The oil companies main interest is economical. They would like to produce the hydrocarbons in the most optional fashion so that they can maximize the benefits. To structure a contract between these two parties which will create a win-win situation for both the parties is a challenging task. The solution is the various types of contracts which have evolved over the last thirty years which try to balance the interest of both the host country and the international oil company.,In the first part of this section, we will discuss the background of international contracts which led to the development of modern contracts. In the next part, we present the purpose of each of the parties involved in the contract so that the understanding of the terms in the contracts becomes easy. In the next three parts we illustrate the three types of contracts which are most commonly used.,These types of contracts are concession agreements, production sharing contracts and service contracts. Concession agreements require the least involvement of host countries; whereas, the service contracts require the most involvement of the host countries. We will discuss both the advantages and disadvantages of these contracts and illustrate the applications of these contracts with several examples.,4.3.1 History The early history of the world oil concessions is mostly dictated by the results of the two world wars. The oil companies from the victors of the two world wars largely controlled the oil production in the world. Specifically, “seven sisters“ (Exxon, Mobil, Chevron, Shell, Gulf now a part of Chevron, Texaco and British Petroleum) dominated the worlds oil reserves as well as transportation, refining and marketing of petroleum.,Realizing the increasing importance of oil in the modem world, many of the “seven sisters“ signed contracts with the rulers of the host countries to acquire the rights to explore for and produce hydrocarbons from these countries. Although the original contracts differed from one another, many of these contracts contained some common features.,These features are: * Definition of area which described the physical boundaries. Oil companies had the right to explore for and develop these areas. * Minimum amount of drilling required over a period of time till hydrocarbons are found in commercial quantities. * Duration of the agreement between 60-75 years. * Financial obligations of company which include signing bonus, annual rental fee and royalties for each barrel of oil produced. * Provision(規(guī)定） to supply domestic oil requirements to the host country at some predetermined cost(預(yù)計成本). * Other rights such as freedom of taxation or production controls.,These contracts were largely based on the oil and gas leases typically signed between the mineral owner and the oil company in the United States. For example, a contract between SOCAL (now Chevron) and King of Saudi Arabia covered an area of approximately 500,000 miles over a sixty-six year term. Ruler of Abu Dhabi granted a seventy-five year concession to a consortium of oil companies covering the entire country. Similarly, the Kuwait concession was over a seventy- five year period covering the entire country.,In these agreements, the host countries did not participate in managerial(管理) decisions. Sole benefit received by the host countries is the royalties. In many contracts, the royalties were fixed at a flat rate(統(tǒng)一費率) per barrel of oil rather than based on the sale price. Even when the royalties are based on the sale price, the oil price was primarily set by the oil companies. Since many concessions were held(控制) by the consortia of oil companies, by making joint off-take agreements, the total production from virtually all major concessions could be controlled. This, in turn, controlled the price of the oil and hence the royalty payments.,Many host countries started realizing the drawbacks of these traditional agreements. The major problem being the lack of control over the exploitation of minerals on their own sovereign(統(tǒng)治) land. Venezuela demanded that the oil contracts be revised to allow for higher royalties and taxes in return for a forty year renewal. In 1948, Venezuela passed a law that established the Venezuelan government as a partner with the multinational(跨國) oil companies.,In Mexico, the oil companies were granted virtual ownership in the oil produced from the concession without any term limit. This changed in 1917 with change in Mexican Constitution which explicitly granted the ownership of natural resources to the Mexican government. Over the next twenty years, the Mexican government imposed new taxes which oil companies refused to pay. This led to increasing disputes between the two parties. Eventually, in 1938, the government announced expropriation of the oil industry, transferring the production to its national oil company, Pemex.,Argentina approached the problem of dealing with international companies in a different way. Argentina was the first country to establish a national oil company, YPF (Yacimientos Petroliferos Fiscales Agrentinos). YPF slowly started capturing the domestic retail gasoline market. Further, the government started granting exclusive rights to YPF to explore for and produce hydrocarbons from new territories. The multinational oil companies started losing interest since they were unable to explore for new production.,Most countries in the Middle East resorted to re-negotiation of the original contracts to secure more favorable terms. Several factors contributed to re-negotiation of these contracts. First, the emergence of small or medium size oil companies which were not part of the “seven sisters.“ To compete with the “seven sisters“ these companies were willing to provide more favorable terms to the host countries. Second, several oil producing countries joined together to form the Organization of Petroleum Exporting Countries (OPEC).,The existence of one entity representing the interests of many countries helped coordinate efforts to re-negotiate the original contracts. OPEC also facilitated sharing of information between different countries helping them to re-negotiate contracts with more favorable terms. It also become increasingly obvious that it is unfair to tie royalties of individual countries to the posted prices controlled by the “seven sisters.“ By the end of the 1970s, the majority of the Middle Eastern OPEC countries nationalized their petroleum industries.,During the 1970s and 1980s, producing countries outside OPEC increasingly demanded better terms in the contracts between the host country or its nationalized oil company and the international oil company. The oil prices where high and the areas where the international oil companies can explore were limited. This resulted in significant oil production outside the OPEC and resulted in decreasing share of the OPEC countries in the worldwide production. Eventually, in 1985, OPEC abandoned its effort to control oil prices. Instead, it targeted certain percentage of the worlds share of oil production. This resulted in a collapse of the oil price.,With lowering of oil price and opening of new countries such as Russia and Vietnam, the international contracts are further evolved. To attract foreign investment, many host countries are offering more favorable terms to the international oil companies. This has resulted in changes in some terms of the international contracts. Overall, however, the three types of contracts have emerged as the most commonly used types of international contracts. What type of contracts a host country uses depends on its objectives. In the next part, we will discuss the type of objectives the host countries normally want to achieve in signing an international contract.,4.3.2 Objectives In signing a contract between a host country and an international oil company, both parties want to achieve certain objectives. Independent of the type of contract which is signed between the two parties, both parties try to satisfy most of the objectives. To understand the terms included in the contract, it is important to consider the objectives of the parties involved in the contract.,Objectives Of The Host Country The objectives of the host country can be divided into three broad categories; financial, political and technical. Each of these objectives are described below. * Financial By inviting an international oil company to explore for and produce hydrocarbons, the host country can eliminate, or at least, minimize the initial capital investment. If the project is successful, by ensuring appropriate terms in the contract, the host country can secure significant amount of financial benefits from the production of hydrocarbons. These benefits can be reinvested in other similar or different projects of national interest.,* Political Most of the developing countries have been previously colonized by Western countries. Awarding contracts to international oil companies is a sensitive issue and involves a national pride. To overcome this foreign dependence, the host countries would like to maintain control over the operations of the project as well as the hydrocarbons produced as a result of the contract. Instead of being passive beneficiaries, the host countries would prefer to play an active role in the field developments so that the natural resources are optimally exploited to the countrys benefit. Further, by controlling the hydrocarbon production, the country may be able to influence desired foreign policy goals. It can also reduce the imports and gain economic efficiency.,* Technical By signing a contract with an international oil company, the host country can benefit from the technical expertise within the oil company. This will not only reduce the risk in the exploration efforts, but also will utilize the latest technology in the development of the oil field. In addition, the host country will also like to gain technological independence so that, eventually, the future fields can be discovered using local talent and local companies. Therefore, the host country will prefer that the international oil companies hire domestic force, provide education grants and local R&D effort, and transfer technology to the local talent. In addition, the companies should also prefer the local companies for the outside contracts.,Objectives Of International Oil Companies Similar to the objectives of host countries, the objectives of international oil companies can be described in three broad categories: financial, operational and political.,* Financial The companies would like to maximize their benefit with minimum amount of cost. They will also prefer that the initial investment be recovered as soon as possible (short pay back period) so as to minimize the impact of any political uncertainties. The companies also prefer that the revenue generated can be repatriated(返回國內(nèi)) and their share of crude can be sold in the open world market.,* Operational The international oil companies prefer to have an operational control over the project. Rather than sharing the operational responsibilities with some bureaucratic agency(官僚當(dāng)局), they will prefer to operate the field so as to preserve the economics. The international oil companies fear that by sharing controls with a host country or its wholly owned subsidiary(輔助的), the production decisions may be made based on domestic political considerations rather than sound economics.,* Political The international oil companies realize that their existence depends on the ability to explore for and produce hydrocarbons from host countrys sovereign land. It is, therefore, important that good working relationship be maintained with the host country and the local community so that the company can secure additional concessions when awarded. The company, therefore, is willing to spend resources on the development of local communities as well as local talent.,On the other hand, the companies want to be careful as to what terms are agreed to in signing the contract. The companies prefer not to set a precedent in one contract which can be used against them in either the same country or in other countries. If the company gives in too much, it will be subjected to similar demands in the future.,4.3.3 Types Of Contracts The three types of contracts most commonly used between a host country and an international oil company are concession agreements, production sharing agreements and service contracts.,concession 租讓制,世界上進行石油勘探開發(fā)最早使用的一種體制。它規(guī)定石油公司有權(quán)在租讓區(qū)進行勘探、開發(fā)、生產(chǎn)以及根據(jù)自己所確定的價格和數(shù)量、出口所生產(chǎn)的石油，主權(quán)國通常只得到礦區(qū)使用費作為報酬。目前仍有一些國家對外國石油公司采取租讓制方式，但已有許多改進，有的還可得到其他利潤和定金，特別是增加了參股條款和所得稅。 production sharing agreements 國際上石油合作開發(fā)的一種很通行的合同形式。印度尼西亞最早采用。其主要特點是規(guī)定石油公司可從合同區(qū)油田的每年原油產(chǎn)量中通過產(chǎn)品分成辦法回收其成本，并在向資源國政府交納所得稅后享受利潤分成，由合同雙方按規(guī)定比例分配，以原油支付。 service contracts. 在石油合作中，服務(wù)合同是其中的一種方式，這種合同方式一般有兩種，一種是單純承包性質(zhì)的，目前在石油界很少采用。另一種是風(fēng)險性質(zhì)的，由石油公司提供勘探資金和技術(shù)，并負(fù)責(zé)具體實施作業(yè)，承包全部勘探風(fēng)險，在投產(chǎn)后，一般可以低價取得原油，作為報酬。,In this section, we will briefly describe each of these contracts highlighting their common features and the fiscal(財政的) impact of each of these contracts. Detailed economic evaluation of each of these contracts is differed till the next section. It is important to note that none of the types of contracts is economically inherently superior to the other types of contracts. By changing the individual terms of a particular contract, any contract can be made more or less beneficial to any party.,Although we will be discussing the contracts between the host country and an international oil company, as a practical matter, a contract is typically signed between a nationalized oil company and an international oil company. Creation of national oil company is helpful in separating the financial benefits recovered from the oil revenues. Also, by creating a company, it is easier to develop technical expertise among the citizens of the country.,It is also believed that a separate company will be able to run more efficiently without the burden of imposing bureaucracy. Although separate, these national companies have the same objectives as the host countries. Table 4.2 lists the names of the country and its national oil company. The most notable exceptions in this list are the United States and the United Kingdom who do not have a nationalized oil company.,* Concession Agreements Concession type of agreement is very similar to the standard oil and gas lease signed between a mineral owner and the producer. In this agreement, the host country assigns the rights to explore for and produce from a concession area to the international oil company. In return, the host country receives royalty payments and income taxes from the proceeds.,In addition, the host country may also receive a signing bonus and other incentives such as training of the domestic work force. In these types of agreements, the host country does not participate in day to day operations of the field.,One modification used for this type of contract is that the host country, in addition to receiving benefits, may also participate in the day to day operation of the contract. This modified contract is called a participation agreement.,* Production Sharing Contracts In these types of contracts, the international oil company bears the cost and risk during the exploration phase. However, if successful, the host country participates during the production phase by paying for part of the costs and receiving part of the production based on the agreed upon formula. In addition, the host country also receives income taxes on the international companys profits.,* Service Contracts In service contracts, the international oil company acts as a service contractor. The