Features of the conditions of the competition for the conclusion of production sharing agreements (oil and gas complex)

To ensure transparency and achieve competition between investors, the practice of organizing and conducting competitions for concluding production sharing agreements has developed the following approaches.

Thus, the announcement of a competition for the conclusion of a production sharing agreement is published in official printed publications and on the official website of the responsible state authority (future party to the agreement).

As a rule, investors, who have special permits for the use of subsoil and do not properly fulfill the duties of a subsoil user, are not allowed to participate in the competition for the conclusion of production sharing agreements.

Investors submit an application to the organizer of the competition for the conclusion of production sharing agreements (competitional tender commission), in which they indicate brief information about their experience in the field of subsoil use, as well as information about the technical and financial capabilities for performing the work and about the technologies that will be used during the use of subsoil, confirmed by documentation.

Investors also submit for consideration by a specially created competitional tender commission a program of work on the subsoil area, on fulfilling the main conditions of the tender, indicating measures aimed at protecting the subsoil and the environment, as well as the dates for the start and completion of work.

Typically, investors are asked to indicate in their application the size and types of investment, as well as proposals for the distribution of extracted products.

The investor's application, together with the documents submitted in support of it, is considered according to the following criteria:

1) mandatory components of the Work Program (the presence of 2D and 3D seismic surveys, drilling of wells in terms of the number of wells, considering their main parameters: depth, drilling trajectory, restoration of abandoned wells, the presence in the Work Program of further study of the area in parallel with the development of already discovered deposits (parallel development).

2) minimum guaranteed investment volume for the implementation of the five-year Work Program.

3) the volume of hydrocarbons produced over the last five years, seismic surveys conducted over the last ten years over 5,000 square kilometers.

4) experience drilling from two to five wells.

5) proven experience working in high pressure and high temperature conditions.

6) proven experience working with horizontal wells.

7) successful rate of drilling wells during the search for hydrocarbons (over 50 percent).

8) experience in the extraction of unconventional hydrocarbons.

9) application of modern technological solutions during extraction (coiled tubing, snubbing, etc.).

The sum of the scores for all criteria according to the specified scale constitutes the final score of the application and is the basis for determining the winner of the competition.

The described application selection system is used by governments when selecting the winner of the competition for a certain area of the field where it is planned to declare oil and gas production.