Bonuses and premiums from the investor in production sharing agreements

The launch of production sharing agreements is associated with the initial payment of premiums and various bonuses by the investor.

Such premiums and bonuses are either linked to a certain stage of the production sharing agreement or to the achievement of a certain level of hydrocarbon production.

Let us name the most common forms of premiums and bonuses.

Bonuses:

1) Community bonus upon reaching the base level of natural gas production.

2) Social bonus.

3) Bonus upon reaching the peak level of natural gas production.

4) Bonus upon reaching the base level of crude oil production.

5) Bonus upon reaching the peak level of crude oil production.

6) Bonus upon reaching a stable level of production.

7) Bonus-waiver of compensation.

8) Bonus for signing a production sharing agreement.

9) Bonus for the first sale of extracted hydrocarbons.

10) Second bonus for hydrocarbon production upon reaching the average daily value.

11) Bonus for the transfer of rights and obligations.

12) Production Bonus. The amount of the production bonus varies depending on the total quantities, expressed in barrels of crude oil, of hydrocarbons produced.

13) Bonus for announcing the start date of the production sharing agreement.

14) Bonus for the first gas from the first pilot-industrial development of the drilling technology project.

Types of premius include:

1) for commercial discovery;

2) for concluding an agreement.

The investor may also be subject to an additional obligation at the stage of the competition in the form of payment of a security, which confirms the investor's ability to subsequently fulfill the terms of a future production sharing agreement.

Security is usually provided at a level no lower than a bank guarantee.