The Model Production Sharing Agreements (PSA) of 2003 and 2023 are critical legal frameworks governing petroleum exploration and production in Pakistan. These agreements establish the terms and conditions under which contractors undertake petroleum operations, ensuring a balance between incentivising investment and protecting national interests. Over the years, significant updates have been made to these agreements to reflect evolving industry practices, technological advancements, and regulatory requirements.
The 2003 PSA provided a robust foundation for petroleum operations, emphasizing environmental protection, cost recovery, and equitable sharing of profits. As the industry and regulatory environment evolved, the need for an updated framework became apparent, leading to the introduction of the 2023 PSA. This new agreement incorporates changes to enhance efficiency, ensure better environmental compliance, and adapt to the current economic and technological landscape.
This comprehensive Q&A document compares the 2003 and 2023 PSAs, highlighting the key similarities and differences in various aspects such as exploration periods, cost recovery mechanisms, environmental obligations, and dispute resolution procedures. The comparison aims to provide a clear understanding of how the regulatory framework for petroleum operations in Pakistan has evolved over the past two decades, offering insights into the strategic shifts that shape the industry today.
- Q: What is the term of the initial exploration period in the 2003 PSA? A: The initial term of the exploration period in the 2003 PSA is five contract years .
- Q: How is the initial term of the exploration period defined in the 2023 PSA? A: The initial term of the exploration period in the 2023 PSA is also five contract years, divided into two phases of three and two years, respectively .
- Q: What are the conditions for the first and second renewals of the exploration period under the 2003 PSA? A: Under the 2003 PSA, the first and second renewals are each for two contract years, contingent on the contractor meeting specific obligations and making mandatory relinquishments .
- Q: What changes have been made to the renewal periods in the 2023 PSA? A: The 2023 PSA reduces the renewal periods to one contract year each for the first and second renewals .
- Q: How does the 2003 PSA address the extension of the term for drilling in progress? A: The 2003 PSA allows for an extension of up to 180 days for drilling an exploration well in progress, which will be considered part of the current term .
- Q: What is the provision for term extension for drilling in progress in the 2023 PSA? A: The 2023 PSA permits an extension for drilling an exploration well in progress for a period approved by the DGPC .
- Q: How are significant gas discovery areas treated under the 2003 PSA? A: Significant gas discovery areas can extend the duration of the agreement by a period equal to the applicable retention period .
- Q: Has there been any modification in the treatment of significant gas discovery areas in the 2023 PSA? A: The 2023 PSA retains similar provisions for extending the term for significant gas discovery areas by the retention period .
- Q: What is the definition of “Work Unit” in the 2003 PSA? A: “Work Unit” in the 2003 PSA is defined in Annex III and involves a valuation for seismic surveys and exploration wells .
- Q: How is “Work Unit” defined in the 2023 PSA? A: The definition of “Work Unit” in the 2023 PSA remains similar, with details provided in Annex III, but includes updated values and work categories .
- Q: Describe the relinquishment obligations at the end of the initial term under the 2003 PSA. A: At the end of the initial term, the contractor must relinquish at least 20% of the original contract area .
- Q: How have the relinquishment obligations changed in the 2023 PSA? A: The 2023 PSA increases the relinquishment obligation to 30% of the original contract area at the end of the first phase of the initial term .
- Q: What are the dispute resolution mechanisms in the 2003 PSA? A: Disputes under the 2003 PSA are first attempted to be resolved amicably, then may be referred to a sole expert, and if unresolved, to arbitration under ICC rules .
- Q: What are the key changes in dispute resolution in the 2023 PSA? A: The 2023 PSA maintains a similar structure but specifies arbitration under the PCA Arbitration Rules 2012, with different rules for disputes involving local contracting companies .
- Q: How does the 2003 PSA handle the costs of arbitration? A: The costs of the sole expert and arbitration are to be borne equally by the concerned parties .
- Q: Are there any changes to the handling of arbitration costs in the 2023 PSA? A: The 2023 PSA does not specifically alter the equal cost-sharing arrangement for arbitration costs .
- Q: What are the environmental protection obligations under the 2003 PSA? A: The contractor must conduct operations in an environmentally acceptable manner, prepare contingency plans, and promptly address any environmental incidents .
- Q: Have environmental protection obligations been updated in the 2023 PSA? A: The 2023 PSA maintains similar environmental protection obligations, emphasizing compliance with good international petroleum industry practices .
- Q: How does the 2003 PSA address the use of local goods and services? A: The contractor is encouraged to use local goods and services where they are competitive in terms of quality, price, and availability
. - Q: Is there a change in the use of local goods and services provision in the 2023 PSA? A: The 2023 PSA continues to encourage the use of local goods and services under similar competitive conditions .
- Q: What are the penalties for non-performance of minimum work obligations in the 2003 PSA? A: Non-performance of minimum work obligations incurs a penalty of $10,000 per unaccomplished Work Unit .
- Q: Have the penalties for non-performance of minimum work obligations changed in the 2023 PSA? A: The 2023 PSA retains the same penalty amount of $10,000 per unaccomplished Work Unit .
- Q: What is the procedure for approving development plans under the 2003 PSA? A: The development plan must be submitted for approval to the relevant authorities, including detailed work programmes and budgets .
- Q: Has the procedure for approving development plans been altered in the 2023 PSA? A: The 2023 PSA retains a similar procedure for the approval of development plans, with emphasis on compliance with updated rules .
- Q: How are force majeure events handled in the 2003 PSA? A: Force majeure events temporarily suspend obligations, and the affected party must notify and work with the other parties to mitigate impacts .
- Q: What provisions for force majeure are included in the 2023 PSA? A: The 2023 PSA includes similar force majeure provisions, allowing suspension of obligations and requiring notification and mitigation efforts .
- Q: What are the obligations for site restoration and abandonment in the 2003 PSA? A: The contractor must prepare and submit site restoration plans, and perform necessary activities to restore the site after operations .
- Q: Have the site restoration and abandonment obligations changed in the 2023 PSA? A: The 2023 PSA continues to require site restoration plans and activities, aligning with good international petroleum industry practices .
- Q: How does the 2003 PSA address the ownership of assets used in petroleum operations? A: The contractor retains ownership of assets during the contract term but must transfer them to GHPL upon termination or expiry of the agreement without compensation .
- Q: Is there a modification in asset ownership provisions in the 2023 PSA? A: The 2023 PSA maintains the provision that assets used in petroleum operations must be transferred to GHPL upon termination or expiry of the agreement .
- Q: How does the 2003 PSA address cost recovery for petroleum operations? A: The 2003 PSA allows the contractor to recover costs from up to 85% of the available oil and gas produced, referred to as Cost Recovery Oil and Cost Recovery Gas, respectively .
- Q: Has the cost recovery provision changed in the 2023 PSA? A: The 2023 PSA retains the provision for cost recovery from up to 85% of the available oil and gas produced .
- Q: What are the profit oil and gas sharing arrangements under the 2003 PSA? A: The 2003 PSA provides a sliding scale for profit oil and gas sharing based on cumulative production, with the government’s share increasing as production volumes increase .
- Q: Are there any changes in the profit oil and gas sharing arrangements in the 2023 PSA? A: The 2023 PSA maintains a similar sliding scale mechanism for profit oil and gas sharing, ensuring the government’s share increases with higher production volumes .
- Q: How does the 2003 PSA handle the abandonment of petroleum operations? A: The contractor must submit an abandonment plan at least one year prior to termination of production and establish an escrow account for the estimated costs of implementing the plan .
- Q: Has the abandonment procedure been updated in the 2023 PSA? A: The 2023 PSA requires the contractor to submit an abandonment plan and establish an escrow account for abandonment costs, maintaining the same procedural requirements as the 2003 PSA .
- Q: What is the procedure for environmental protection in the 2003 PSA? A: The 2003 PSA mandates the contractor to employ advanced techniques to prevent environmental damage, take necessary steps to minimize any adverse impact, and conduct environmental impact studies .
- Q: Are there any changes to environmental protection obligations in the 2023 PSA? A: The 2023 PSA continues to emphasize the use of advanced techniques for environmental protection and requires environmental impact studies, reflecting similar commitments to those in the 2003 PSA .
- Q: How does the 2003 PSA address the use of local personnel and services? A: The contractor is encouraged to employ local personnel and use local services where competitive in terms of quality, price, and availability .
- Q: Has the provision for the use of local personnel and services changed in the 2023 PSA? A: The 2023 PSA retains the encouragement for using local personnel and services under similar competitive conditions .
- Q: What are the reporting requirements for contractors under the 2003 PSA? A: The 2003 PSA requires contractors to provide comprehensive reports on petroleum operations, including geological, geophysical, and production data .
- Q: Are there any changes to the reporting requirements in the 2023 PSA? A: The 2023 PSA maintains similar reporting requirements, ensuring that contractors provide detailed and regular updates on petroleum operations .
- Q: How are royalties calculated in the 2003 PSA? A: Royalties in the 2003 PSA are calculated based on the value of petroleum at the measurement point, as defined by the agreement and relevant rules .
- Q: Has the calculation method for royalties been modified in the 2023 PSA? A: The 2023 PSA continues to calculate royalties based on the value of petroleum at the measurement point, maintaining consistency with the 2003 PSA .
- Q: What is the provision for training and employment of Pakistani personnel in the 2003 PSA? A: The 2003 PSA requires the contractor to submit plans for the training and employment of Pakistani personnel as part of the development plan .
- Q: Does the 2023 PSA include similar provisions for training and employment of Pakistani personnel? A: Yes, the 2023 PSA also mandates the contractor to provide plans for the training and employment of Pakistani personnel, reflecting continuity in policy .
- Q: How does the 2003 PSA handle the confidentiality of data? A: The contractor must treat all data obtained from petroleum operations as confidential and can only disclose it with the government’s written consent or under specific conditions .
- Q: Are there any changes to the confidentiality provisions in the 2023 PSA? A: The 2023 PSA maintains similar confidentiality requirements, ensuring that data remains protected and only disclosed under approved conditions .
- Q: What are the insurance and indemnification requirements under the 2003 PSA? A: The contractor is required to maintain adequate insurance to cover risks associated with petroleum operations and indemnify the government against certain liabilities .
- Q: Has the insurance and indemnification clause been updated in the 2023 PSA? A: The 2023 PSA continues to require contractors to maintain adequate insurance and provide indemnification, consistent with the 2003 PSA .
- Q: How does the 2003 PSA address the transfer of rights and obligations? A: The contractor can transfer its rights and obligations under the agreement with the government’s prior written consent, subject to specific conditions .
- Q: Are there any changes to the transfer of rights and obligations in the 2023 PSA? A: The 2023 PSA retains similar provisions, requiring government approval for any transfer of rights and obligations .
- Q: What is the process for dispute resolution under the 2003 PSA? A: Disputes are first attempted to be resolved amicably, followed by referral to a sole expert, and if unresolved, to arbitration under ICC rules .
- Q: Has the dispute resolution process been modified in the 2023 PSA? A: The 2023 PSA specifies arbitration under the PCA Arbitration Rules 2012, with certain rules for disputes involving local contracting companies .
- Q: How are production bonuses structured in the 2003 PSA? A: Production bonuses are structured based on cumulative production milestones, with specified amounts payable to the government .
- Q: Are there any changes to the production bonuses in the 2023 PSA? A: The 2023 PSA maintains similar production bonus structures, ensuring payments are made upon reaching cumulative production milestones .
- Q: How does the 2003 PSA handle the ownership of petroleum produced? A: The contractor retains ownership of petroleum produced during the contract term but must transfer it to GHPL upon termination or expiry without compensation .
- Q: Is there a change in the ownership provisions of petroleum in the 2023 PSA? A: The 2023 PSA maintains the provision that ownership of petroleum must be transferred to GHPL upon termination or expiry of the agreement .
- Q: What are the obligations for site restoration and abandonment in the 2003 PSA? A: The contractor must prepare site restoration plans and perform necessary activities to restore the site after operations .
- Q: Have the site restoration and abandonment obligations changed in the 2023 PSA? A: The 2023 PSA continues to require site restoration plans and activities, aligning with good international petroleum industry practices .
- Q: How does the 2003 PSA address the extension of the exploration period? A: The 2003 PSA allows for extensions of the exploration period under specific conditions, such as significant discoveries or drilling in progress .
- Q: Are there any changes to the extension provisions in the 2023 PSA? A: The 2023 PSA includes similar provisions for extending the exploration period, with updates to reflect current practices and conditions .
- Q: What is the procedure for declaring a commercial discovery under the 2003 PSA? A: The contractor must notify the DGPC in writing and submit a detailed report and development plan within twelve months for approval .
- Q: Has the procedure for declaring a commercial discovery changed in the 2023 PSA? A: The 2023 PSA retains a similar procedure, requiring notification, a detailed report, and a development plan for approval .
- Q: How are significant gas discoveries treated under the 2003 PSA? A: Significant gas discoveries can extend the duration of the agreement by a period equal to the applicable retention period, subject to approval .
- Q: Has there been any modification in the treatment of significant gas discoveries in the 2023 PSA? A: The 2023 PSA continues to allow extensions for significant gas discoveries, with a maximum retention period of up to ten years, subject to approval .
- Q: How does the 2003 PSA handle force majeure events? A: Force majeure events temporarily suspend obligations, and the affected party must notify and work with the other parties to mitigate impacts .
- Q: What provisions for force majeure are included in the 2023 PSA? A: The 2023 PSA includes similar force majeure provisions, allowing suspension of obligations and requiring notification and mitigation efforts .
- Q: What are the penalties for non-performance of minimum work obligations in the 2003 PSA? A: Non-performance of minimum work obligations incurs a penalty of $10,000 per unaccomplished Work Unit .
- Q: Have the penalties for non-performance of minimum work obligations changed in the 2023 PSA? A: The 2023 PSA retains the same penalty amount of $10,000 per unaccomplished Work Unit .
- Q: How does the 2003 PSA handle the use of local goods and services? A: The contractor is encouraged to use local goods and services where they are competitive in terms of quality, price, and availability .
- Q: Is there a change in the use of local goods and services provision in the 2023 PSA? A: The 2023 PSA continues to encourage the use of local goods and services under similar competitive conditions .
- Q: How are training and employment of Pakistani personnel addressed in the 2003 PSA? A: The contractor is required to submit plans for the training and employment of Pakistani personnel as part of the development plan .
- Q: Does the 2023 PSA include similar provisions for training and employment of Pakistani personnel? A: Yes, the 2023 PSA mandates the contractor to provide plans for the training and employment of Pakistani personnel .
- Q: How does the 2003 PSA address the confidentiality of data? A: The contractor must treat all data obtained from petroleum operations as confidential and can only disclose it with the government’s written consent or under specific conditions .
- Q: Are there any changes to the confidentiality provisions in the 2023 PSA? A: The 2023 PSA maintains similar confidentiality requirements, ensuring that data remains protected and only disclosed under approved conditions .
- Q: What are the insurance and indemnification requirements under the 2003 PSA? A: The contractor is required to maintain adequate insurance to cover risks associated with petroleum operations and indemnify the government against certain liabilities .
- Q: Has the insurance and indemnification clause been updated in the 2023 PSA? A: The 2023 PSA continues to require contractors to maintain adequate insurance and provide indemnification, consistent with the 2003 PSA .
- Q: How does the 2003 PSA address the transfer of rights and obligations? A: The contractor can transfer its rights and obligations under the agreement with the government’s prior written consent, subject to specific conditions .
- Q: Are there any changes to the transfer of rights and obligations in the 2023 PSA? A: The 2023 PSA retains similar provisions, requiring government approval for any transfer of rights and obligations .
- Q: What is the process for dispute resolution under the 2003 PSA? A: Disputes are first attempted to be resolved amicably, followed by referral to a sole expert, and if unresolved, to arbitration under ICC rules .
- Q: Has the dispute resolution process been modified in the 2023 PSA? A: The 2023 PSA specifies arbitration under the PCA Arbitration Rules 2012, with certain rules for disputes involving local contracting companies .
- Q: How are production bonuses structured in the 2003 PSA? A: Production bonuses are structured based on cumulative production milestones, with specified amounts payable to the government .
- Q: Are there any changes to the production bonuses in the 2023 PSA? A: The 2023 PSA maintains similar production bonus structures, ensuring payments are made upon reaching cumulative production milestones .
- Q: How does the 2003 PSA handle the ownership of petroleum produced? A: The contractor retains ownership of petroleum produced during the contract term but must transfer it to GHPL upon termination or expiry without compensation .
- Q: Is there a change in the ownership provisions of petroleum in the 2023 PSA? A: The 2023 PSA maintains the provision that ownership of petroleum must be transferred to GHPL upon termination or expiry of the agreement .
- Q: What are the obligations for site restoration and abandonment in the 2003 PSA? A: The contractor must prepare site restoration plans and perform necessary activities to restore the site after operations .
- Q: Have the site restoration and abandonment obligations changed in the 2023 PSA? A: The 2023 PSA continues to require site restoration plans and activities, aligning with good international petroleum industry practices .
- Q: How does the 2003 PSA address the extension of the exploration period? A: The 2003 PSA allows for extensions of the exploration period under specific conditions, such as significant discoveries or drilling in progress .
- Q: Are there any changes to the extension provisions in the 2023 PSA? A: The 2023 PSA includes similar provisions for extending the exploration period, with updates to reflect current practices and conditions .
- Q: What is the procedure for declaring a commercial discovery under the 2003 PSA? A: The contractor must notify the DGPC in writing and submit a detailed report and development plan within twelve months for approval .
- Q: Has the procedure for declaring a commercial discovery changed in the 2023 PSA? A: The 2023 PSA retains a similar procedure, requiring notification, a detailed report, and a development plan for approval .
- Q: How are significant gas discoveries treated under the 2003 PSA? A: Significant gas discoveries can extend the duration of the agreement by a period equal to the applicable retention period, subject to approval .
- Q: Has there been any modification in the treatment of significant gas discoveries in the 2023 PSA? A: The 2023 PSA continues to allow extensions for significant gas discoveries, with a maximum retention period of up to ten years, subject to approval .
- Q: How does the 2003 PSA handle force majeure events? A: Force majeure events temporarily suspend obligations, and the affected party must notify and work with the other parties to mitigate impacts .
- Q: What provisions for force majeure are included in the 2023 PSA? A: The 2023 PSA includes similar force majeure provisions, allowing suspension of obligations and requiring notification and mitigation efforts .
- Q: What are the penalties for non-performance of minimum work obligations in the 2003 PSA? A: Non-performance of minimum work obligations incurs a penalty of $10,000 per unaccomplished Work Unit .
- Q: Have the penalties for non-performance of minimum work obligations changed in the 2023 PSA? A: The 2023 PSA retains the same penalty amount of $10,000 per unaccomplished Work Unit .
- Q: How does the 2003 PSA handle the use of local goods and services? A: The contractor is encouraged to use local goods and services where they are competitive in terms of quality, price, and availability .
- Q: Is there a change in the use of local goods and services provision in the 2023 PSA? A: The 2023 PSA continues to encourage the use of local goods and services under similar competitive conditions .
- Q: How does the 2003 PSA handle the discovery of a significant gas area? A: The 2003 PSA allows the contractor to apply for a retention period of up to ten years for each significant gas discovery area following the date of the significant gas discovery.
- Q: What changes have been made regarding the significant gas discovery retention period in the 2023 PSA? A: The 2023 PSA reduces the maximum retention period for a significant gas discovery to five years, with a possibility of an extension for an additional five years subject to justification acceptable to the Authority. No retention period is allowed for an oil discovery .
- Q: What are the reporting requirements for commercial discoveries in the 2003 PSA? A: The contractor must provide a detailed report on each commercial discovery, covering factors such as the chemical composition, physical properties, and quality of petroleum discovered
- Q: Have the reporting requirements for commercial discoveries been updated in the 2023 PSA? A: The 2023 PSA r.etains similar requirements for reporting commercial discoveries, including detailed information on the chemical composition, physical properties, and quality of petroleum .
- Q: How does the 2003 PSA address the establishment of a development area? A: The contractor selects a development area based on the geological entity covering the commercial discovery or significant gas discovery, not exceeding 150 contiguous section.
- Q: Is there any change in the establishment of a development area in the 2023 PSA? A: The 2023 PSA retains the provision that the development area should not exceed the geological entity covering the commercial discovery or significant gas discovery and must be an area of no more than 150 contiguous sections .
- Q: How does the 2003 PSA handle environmental impact studies? A: The 2003 PSA requires environmental impact studies to be carried out by experts approved by the government to determine the environmental impact of petroleum operations and establish methods to minimize environmental damage .
- Q: Have the requirements for environmental impact studies changed in the 2023 PSA? A: The 2023 PSA continues to mandate environmental impact studies by approved experts, maintaining similar requirements to ensure the minimization of environmental damage .
- Q: What provisions are made for cost recovery in the 2003 PSA? A: The contractor can recover costs from up to 85% of the available oil and gas produced during the cost recovery phase .
- Q: Are the cost recovery provisions different in the 2023 PSA? A: The 2023 PSA retains the same provision, allowing cost recovery from up to 85% of the available oil and gas produced .
- Q: How are profit oil and gas shared under the 2003 PSA? A: Profit oil and gas are shared based on a sliding scale determined by cumulative production, with the government’s share increasing as production volumes increase .
- Q: Has the profit oil and gas sharing mechanism changed in the 2023 PSA? A: The 2023 PSA maintains a similar sliding scale mechanism for profit oil and gas sharing, with the government’s share increasing with higher production volumes .
- Q: How does the 2003 PSA address the submission of development plans? A: The contractor must submit a detailed development plan for each commercial discovery within twelve months of declaring a commercial discovery, including proposals for recovery, storage, and transportation of petroleum【13:0†source】.
- Q: Are there any changes in the submission of development plans in the 2023 PSA? A: The 2023 PSA continues to require the submission of detailed development plans within twelve months of declaring a commercial discovery, with similar content requirements .
- Q: What are the obligations for site restoration in the 2003 PSA? A: The contractor is required to prepare and implement site restoration plans to restore the site after operations, following good international petroleum industry practices .
- Q: Have site restoration obligations been updated in the 2023 PSA? A: The 2023 PSA maintains similar obligations for site restoration, ensuring compliance with good international petroleum industry practices .
- Q: How does the 2003 PSA handle insurance and indemnification? A: The contractor must maintain adequate insurance to cover risks associated with petroleum operations and indemnify the government against certain liabilities .
- Q: Are there changes to the insurance and indemnification requirements in the 2023 PSA? A: The 2023 PSA continues to require contractors to maintain adequate insurance and provide indemnification, consistent with the 2003 PSA .
- Q: What is the procedure for transferring rights and obligations under the 2003 PSA? A: The contractor can transfer its rights and obligations under the agreement with the government’s prior written consent, subject to specific conditions .
- Q: Has the transfer procedure been modified in the 2023 PSA? A: The 2023 PSA retains similar provisions, requiring government approval for any transfer of rights and obligations .
- Q: How are dispute resolution processes defined in the 2003 PSA? A: Disputes are first attempted to be resolved amicably, followed by referral to a sole expert, and if unresolved, to arbitration under ICC rules .
- Q: Are there changes to the dispute resolution processes in the 2023 PSA? A: The 2023 PSA specifies arbitration under the PCA Arbitration Rules 2012, with certain rules for disputes involving local contracting companies .
- Q: How does the 2003 PSA handle production bonuses? A: Production bonuses are structured based on cumulative production milestones, with specified amounts payable to the government .
- Q: Are production bonuses structured differently in the 2023 PSA? A: The 2023 PSA maintains similar production bonus structures, ensuring payments are made upon reaching cumulative production milestones .
- Q: How does the 2003 PSA address the ownership of petroleum produced? A: The contractor retains ownership of petroleum produced during the contract term but must transfer it to GHPL upon termination or expiry without compensation.
- Q: Is there a change in the ownership provisions of petroleum in the 2023 PSA? A: The 2023 PSA maintains the provision that ownership of petroleum must be transferred to GHPL upon termination or expiry of the agreement.
- Q: What are the obligations for site restoration and abandonment in the 2003 PSA? A: The contractor must prepare site restoration plans and perform necessary activities to restore the site after operations .
- Q: Have the site restoration and abandonment obligations changed in the 2023 PSA? A: The 2023 PSA continues to require site restoration plans and activities, aligning with good international petroleum industry practices .
- Q: How does the 2003 PSA address the extension of the exploration period? A: The 2003 PSA allows for extensions of the exploration period under specific conditions, such as significant discoveries or drilling in progress .
- Q: Are there any changes to the extension provisions in the 2023 PSA? A: The 2023 PSA includes similar provisions for extending the exploration period, with updates to reflect current practices and conditions .
- Q: What is the procedure for declaring a commercial discovery under the 2003 PSA? A: The contractor must notify the DGPC in writing and submit a detailed report and development plan within twelve months for approval.
- Q: Has the procedure for declaring a commercial discovery changed in the 2023 PSA? A: The 2023 PSA retains a similar procedure, requiring notification, a detailed report, and a development plan for approval .
- Q: How are significant gas discoveries treated under the 2003 PSA? A: Significant gas discoveries can extend the duration of the agreement by a period equal to the applicable retention period, subject to approval.
- Q: Has there been any modification in the treatment of significant gas discoveries in the 2023 PSA? A: The 2023 PSA continues to allow extensions for significant gas discoveries, with a maximum retention period of up to ten years, subject to approval .
- Q: How does the 2003 PSA handle force majeure events? A: Force majeure events temporarily suspend obligations, and the affected party must notify and work with the other parties to mitigate impacts.
- Q: What provisions for force majeure are included in the 2023 PSA? A: The 2023 PSA includes similar force majeure provisions, allowing suspension of obligations and requiring notification and mitigation efforts .
- Q: What are the penalties for non-performance of minimum work obligations in the 2003 PSA? A: Non-performance of minimum work obligations incurs a penalty of $10,000 per unaccomplished Work Units.
- Q: Have the penalties for non-performance of minimum work obligations changed in the 2023 PSA? A: The 2023 PSA retains the same penalty amount of $10,000 per unaccomplished Work Unit .
- Q: How does the 2003 PSA handle the use of local goods and services? A: The contractor is encouraged to use local goods and services where they are competitive in terms of quality, price, and availability.
- Q: Is there a change in the use of local goods and services provision in the 2023 PSA? A: The 2023 PSA continues to encourage the use of local goods and services under similar competitive conditions .
- Q: How are training and employment of Pakistani personnel addressed in the 2003 PSA? A: The contractor is required to submit plans for the training and employment of Pakistani personnel as part of the development plan .
- Q: Does the 2023 PSA include similar provisions for training and employment of Pakistani personnel? A: Yes, the 2023 PSA mandates the contractor to provide plans for the training and employment of Pakistani personnel .
- Q: How does the 2003 PSA address the confidentiality of data? A: The contractor must treat all data obtained from petroleum operations as confidential and can only disclose it with the government’s written consent or under specific conditions .
- Q: Are there any changes to the confidentiality provisions in the 2023 PSA? A: The 2023 PSA maintains similar confidentiality requirements, ensuring that data remains protected and only disclosed under approved conditions .
- Q: What are the insurance and indemnification requirements under the 2003 PSA? A: The contractor is required to maintain adequate insurance to cover risks associated with petroleum operations and indemnify the government against certain liabilities .
- Q: Has the insurance and indemnification clause been updated in the 2023 PSA? A: The 2023 PSA continues to require contractors to maintain adequate insurance and provide indemnification, consistent with the 2003 PSA .
- Q: How does the 2003 PSA address the transfer of rights and obligations? A: The contractor can transfer its rights and obligations under the agreement with the government’s prior written consent, subject to specific conditions .
- Q: Are there any changes to the transfer of rights and obligations in the 2023 PSA? A: The 2023 PSA retains similar provisions, requiring government approval for any transfer of rights and obligations .
- Q: What is the process for dispute resolution under the 2003 PSA? A: Disputes are first attempted to be resolved amicably, followed by referral to a sole expert, and if unresolved, to arbitration under ICC rules .
- Q: Has the dispute resolution process been modified in the 2023 PSA? A: The 2023 PSA specifies arbitration under the PCA Arbitration Rules 2012, with certain rules for disputes involving local contracting companies .
- Q: How are production bonuses structured in the 2003 PSA? A: Production bonuses are structured based on cumulative production milestones, with specified amounts payable to the government .
- Q: Are there any changes to the production bonuses in the 2023 PSA? A: The 2023 PSA maintains similar production bonus structures, ensuring payments are made upon reaching cumulative production milestones .
- Q: How does the 2003 PSA handle the ownership of petroleum produced? A: The contractor retains ownership of petroleum produced during the contract term but must transfer it to GHPL upon termination or expiry without compensation .
- Q: Is there a change in the ownership provisions of petroleum in the 2023 PSA? A: The 2023 PSA maintains the provision that ownership of petroleum must be transferred to GHPL upon termination or expiry of the agreement .
- Q: What are the obligations for site restoration and abandonment in the 2003 PSA? A: The contractor must prepare site restoration plans and perform necessary activities to restore the site after operations .
- Q: Have the site restoration and abandonment obligations changed in the 2023 PSA? A: The 2023 PSA continues to require site restoration plans and activities, aligning with good international petroleum industry practices .
- Q: How does the 2003 PSA address the extension of the exploration period? A: The 2003 PSA allows for extensions of the exploration period under specific conditions, such as significant discoveries or drilling in progress .
- Q: Are there any changes to the extension provisions in the 2023 PSA? A: The 2023 PSA includes similar provisions for extending the exploration period, with updates to reflect current practices and conditions .
- Q: What is the procedure for declaring a commercial discovery under the 2003 PSA? A: The contractor must notify the DGPC in writing and submit a detailed report and development plan within twelve months for approval .
- Q: Has the procedure for declaring a commercial discovery changed in the 2023 PSA? A: The 2023 PSA retains a similar procedure, requiring notification, a detailed report, and a development plan for approval .
- Q: How are significant gas discoveries treated under the 2003 PSA? A: Significant gas discoveries can extend the duration of the agreement by a period equal to the applicable retention period, subject to approval .
- Q: Has there been any modification in the treatment of significant gas discoveries in the 2023 PSA? A: The 2023 PSA continues to allow extensions for significant gas discoveries, with a maximum retention period of up to ten years, subject to approval .
- Q: How does the 2003 PSA handle force majeure events? A: Force majeure events temporarily suspend obligations, and the affected party must notify and work with the other parties to mitigate impacts .
- Q: What provisions for force majeure are included in the 2023 PSA? A: The 2023 PSA includes similar force majeure provisions, allowing suspension of obligations and requiring notification and mitigation efforts .
- Q: What are the penalties for non-performance of minimum work obligations in the 2003 PSA? A: Non-performance of minimum work obligations incurs a penalty of $10,000 per unaccomplished Work Unit .
- Q: Have the penalties for non-performance of minimum work obligations changed in the 2023 PSA? A: The 2023 PSA retains the same penalty amount of $10,000 per unaccomplished Work Unit .
- Q: How does the 2003 PSA handle the use of local goods and services? A: The contractor is encouraged to use local goods and services where they are competitive in terms of quality, price, and availability .
- Q: Is there a change in the use of local goods and services provision in the 2023 PSA? A: The 2023 PSA continues to encourage the use of local goods and services under similar competitive conditions .
- Q: How are training and employment of Pakistani personnel addressed in the 2003 PSA? A: The contractor is required to submit plans for the training and employment of Pakistani personnel as part of the development plan .
- Q: Does the 2023 PSA include similar provisions for training and employment of Pakistani personnel? A: Yes, the 2023 PSA mandates the contractor to provide plans for the training and employment of Pakistani personnel .
- Q: How does the 2003 PSA address the confidentiality of data? A: The contractor must treat all data obtained from petroleum operations as confidential and can only disclose it with the government’s written consent or under specific conditions .
- Q: Are there any changes to the confidentiality provisions in the 2023 PSA? A: The 2023 PSA maintains similar confidentiality requirements, ensuring that data remains protected and only disclosed under approved conditions .
- Q: What are the insurance and indemnification requirements under the 2003 PSA? A: The contractor is required to maintain adequate insurance to cover risks associated with petroleum operations and indemnify the government against certain liabilities .
- Q: Has the insurance and indemnification clause been updated in the 2023 PSA? A: The 2023 PSA continues to require contractors to maintain adequate insurance and provide indemnification, consistent with the 2003 PSA .
- Q: How does the 2003 PSA address the transfer of rights and obligations? A: The contractor can transfer its rights and obligations under the agreement with the government’s prior written consent, subject to specific conditions .
- Q: Are there any changes to the transfer of rights and obligations in the 2023 PSA? A: The 2023 PSA retains similar provisions, requiring government approval for any transfer of rights and obligations .
- Q: What is the process for dispute resolution under the 2003 PSA? A: Disputes are first attempted to be resolved amicably, followed by referral to a sole expert, and if unresolved, to arbitration under ICC rules .
- Q: Has the dispute resolution process been modified in the 2023 PSA? A: The 2023 PSA specifies arbitration under the PCA Arbitration Rules 2012, with certain rules for disputes involving local contracting companies .
- Q: How are production bonuses structured in the 2003 PSA? A: Production bonuses are structured based on cumulative production milestones, with specified amounts payable to the government .
- Q: Are there any changes to the production bonuses in the 2023 PSA? A: The 2023 PSA maintains similar production bonus structures, ensuring payments are made upon reaching cumulative production milestones .
- Q: How does the 2003 PSA handle the ownership of petroleum produced? A: The contractor retains ownership of petroleum produced during the contract term but must transfer it to GHPL upon termination or expiry without compensation .
- Q: Is there a change in the ownership provisions of petroleum in the 2023 PSA? A: The 2023 PSA maintains the provision that ownership of petroleum must be transferred to GHPL upon termination or expiry of the agreement .
- Q: What are the obligations for site restoration and abandonment in the 2003 PSA? A: The contractor must prepare site restoration plans and perform necessary activities to restore the site after operations .
- Q: Have the site restoration and abandonment obligations changed in the 2023 PSA? A: The 2023 PSA continues to require site restoration plans and activities, aligning with good international petroleum industry practices .
- Q: How does the 2003 PSA address the extension of the exploration period? A: The 2003 PSA allows for extensions of the exploration period under specific conditions, such as significant discoveries or drilling in progress .
- Q: Are there any changes to the extension provisions in the 2023 PSA? A: The 2023 PSA includes similar provisions for extending the exploration period, with updates to reflect current practices and conditions .
- Q: What is the procedure for declaring a commercial discovery under the 2003 PSA? A: The contractor must notify the DGPC in writing and submit a detailed report and development plan within twelve months for approval .
- Q: Has the procedure for declaring a commercial discovery changed in the 2023 PSA? A: The 2023 PSA retains a similar procedure, requiring notification, a detailed report, and a development plan for approval .
- Q: How are significant gas discoveries treated under the 2003 PSA? A: Significant gas discoveries can extend the duration of the agreement by a period equal to the applicable retention period, subject to approval .
- Q: Has there been any modification in the treatment of significant gas discoveries in the 2023 PSA? A: The 2023 PSA continues to allow extensions for significant gas discoveries, with a maximum retention period of up to ten years, subject to approval .
- Q: How does the 2003 PSA handle force majeure events? A: Force majeure events temporarily suspend obligations, and the affected party must notify and work with the other parties to mitigate impacts .
- Q: What provisions for force majeure are included in the 2023 PSA? A: The 2023 PSA includes similar force majeure provisions, allowing suspension of obligations and requiring notification and mitigation efforts .
- Q: What are the penalties for non-performance of minimum work obligations in the 2003 PSA? A: Non-performance of minimum work obligations incurs a penalty of $10,000 per unaccomplished Work Unit .
- Q: Have the penalties for non-performance of minimum work obligations changed in the 2023 PSA? A: The 2023 PSA retains the same penalty amount of $10,000 per unaccomplished Work Unit .
- Q: How does the 2003 PSA handle the use of local goods and services? A: The contractor is encouraged to use local goods and services where they are competitive in terms of quality, price, and availability .
- Q: Is there a change in the use of local goods and services provision in the 2023 PSA? A: The 2023 PSA continues to encourage the use of local goods and services under similar competitive conditions .
- Q: How are training and employment of Pakistani personnel addressed in the 2003 PSA? A: The contractor is required to submit plans for the training and employment of Pakistani personnel as part of the development plan .
- Q: Does the 2023 PSA include similar provisions for training and employment of Pakistani personnel? A: Yes, the 2023 PSA mandates the contractor to provide plans for the training and employment of Pakistani personnel .
- Q: How does the 2003 PSA address the confidentiality of data? A: The contractor must treat all data obtained from petroleum operations as confidential and can only disclose it with the government’s written consent or under specific conditions .
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Q: Are there any changes to the confidentiality provisions in the 2023 PSA? A: The 2023 PSA maintains similar confidentiality requirements, ensuring that data remains protected and only disclosed under approved conditions .
