Puntland Product Sharing Agreement
In January 2007, the Puntland administration, which was then led by President Mohamud Muse Hersi, signed the Puntland Product Sharing Agreement (PSA) with Range Resources Limited and the Canmex Minerals subsidiary Canmex Holdings (Bermuda) II Limited.
Under the terms of the both royalty-based and profit sharing agreement, Canmex would commit to two three-year periods of comprehensive oil exploration in the Nugaal and Dharoor Valley blocks. A 20-year period of exploitation would come into effect in the event of commercial oil yields, with an option to extend the duration an additional 5 years. Gross income would be allocated toward royalty payments, production costs and net profits. The royalty payments for produced crude oil would be deducted first and would be periodically issued to the Puntland government by the oil firms according to a sliding scale: 0-25,000 bopd=4.0% royalty; 25,000-50,000 bopd=5.0% royalty; 50,000-75,000 bopd=7.0% royalty; 75,000-100,000 bopd=9.0% royalty; 100,000 bopd and above=10.0% royalty. After these deductions, up to 70% of gross income would be earmarked for unrecovered capital, operating capital and operating expenses. The remaining gross income would be set aside for profit sharing, with 50% going to the Puntland government and 50% to the oil firms. Any future taxes levied on the petroleum activities would also be paid by the Puntland administration through its share of the oil profits.
Following a change in leadership in 2009, the Puntland government, now led by President Abdirahman Mohamud Farole, sought to renegotiate the profit sharing agreement with Range Resources to ensure more favorable terms for the region.
Read more about this topic: Oil Exploration In Puntland
Famous quotes containing the words product, sharing and/or agreement:
“Whenever a taboo is broken, something good happens, something vitalizing.... Taboos after all are only hangovers, the product of diseased minds, you might say, of fearsome people who hadn’t the courage to live and who under the guise of morality and religion have imposed these things upon us.”
—Henry Miller (1891–1980)
“The meaning of the Street in all ways and at all times is the need for sharing life with others and the search for community.”
—Virginia Hamilton (b. 1936)
“Truth cannot be defined or tested by agreement with ‘the world’; for not only do truths differ for different worlds but the nature of agreement between a world apart from it is notoriously nebulous. Rather—speaking loosely and without trying to answer either Pilate’s question or Tarski’s—a version is to be taken to be true when it offends no unyielding beliefs and none of its own precepts.”
—Nelson Goodman (b. 1906)