During the implementation of the production sharing agreement, issues arise regarding the accounting of produced hydrocarbon products (especially gas), which remain the property of the state.
This problem is being solved in different ways.
Looking ahead, I would like to cite Ukraine's experience in this matter, because after the signing of the Ukrainian American agreement on the creation of a special reconstruction fund, regulatory and legal acts in the field of production sharing agreements have changed dynamically.
On February 9, 2024, the Cabinet of Ministers of Ukraine adopted Resolution No. 169 «On the procedure for the use (sale) of part of the produced products that remain in the ownership of the state in accordance with the production sharing agreement (natural gas)».
The total volume of produced products and the size of the compensatory, profit share, in particular the share of produced products that will remain in the ownership of the state in kind because of distribution, are recorded in the virtual trading point of the gas transportation system of Ukraine.
The investor shall, by the 20th of the month preceding the calendar quarter, inform by letter to the official email address of the State Service of Geology and Subsoil of Ukraine about the expected volumes of production recorded by the investor, the amounts of the compensation and profit share.
The State Service of Geology and Subsoil of Ukraine, by the last day of the month preceding the calendar quarter, shall inform by letter to the official email address of the authorized person about the expected amount of the state share of the produced products that will be transferred by the investor to the authorized person in kind, for each transaction.
The authorized person accepts the state share of natural gas from the investor at the virtual trading point of the gas transportation system of Ukraine for off-balance sheet storage daily using the information platform of the gas transportation system operator of Ukraine.
If the investor does not provide information, the State Geology and Subsoil Service of Ukraine does not sign an act on the conformity of shares of produced products, and the distribution of products is considered not to have taken place.
The investor provides the expected volumes of production for the next quarter, considering the previous quarter, in which the act on the conformity of the shares of production was not signified.
The authorized person sells the state share of the produced products in accordance with the exchange trading regulations on the short-term natural gas market using the exchange trading platform.
The daily balance of the unrealized state share of the produced products constitutes the daily imbalance of the customer of transportation services and is sold.
The amount of cash equivalent from the sale of part of the produced products in profitable hydrocarbons in kind cannot be spent by the authorized person.
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