Oil Marketing Agreements
As a result, developments were delayed, postponed or the expected investment was not made immediately. This was clearly against the interests of the host Government. The treaties did not provide for the renunciation of unenplored areas. In addition, traditional concession contracts were awarded to the OIL IOC “in situ” with market and price power. Royalties were fixed or fixed for unit rates and were sometimes set off against income tax. There was no or no small signing bonus and sometimes no income taxation. These conditions have often been “frozen” for the duration of the agreement. The oil and gas industry operates in countries around the world, in accordance with a number of types of agreements. These agreements can generally be classified into one of four categories (or a combination of categories): risk agreements, concessions, production sharing agreements (PSA, also known as production division contracts, PSCs) and service contracts. These agreements are subject to the financial conclusion of the Baúna transaction and entry into the credit facility is subject to the conclusion of due diligence, as well as the negotiation and completion of the final documentation. Karoon Energy Ltd (“Karoon”) is pleased to announce that its 100% subsidiary Karoon Petróleo e Gás Ltda (“KPG”) has signed a marketing agreement with Shell Western Trading and Supply Limited (“Shell West”), a member of the Royal Dutch Shell plc group, to negotiate and ship crude oil production from the Baúna field in Brazil.
As part of the marketing deal negotiations, Karoon and Shell West have now agreed on terms for Karoon`s $50 million Australian-level loan facility, and Shell West has been granted an internal loan clearance. This loan facility will be used as a reserve resource facility. Karoon will now try to finalize the credit facility documents on the usual commercial terms…