A case of Egypt PSC

Fiscal Regime in Egypt

The fiscal regime is based on production sharing contracts. The parties to the contract shall be the
Arab Republic of Egypt (A.R.E.), state owned petroleum company Egypt General Petrloleum Corp.
(EGPC), and the contractor.
Where a production sharing contract has been signed between EGPC and the contractor, the
contractor pays all exploration costs. In the event of a commercial discovery a joint venture
operating company, owned 50%by EGPC and 50%by the contractor(s), is established.
The joint venture company is non-profit making and all of the capital and operating costs are
funded by the contractor.
The joint venture operating company system allows EGPC to exert a significant level of control
over field developments without requiring the state to fund any of the development.
Typical PSC Structure in Egypt (Illustrative)
PSC
Revenue
35 %
Eligible
Recoverable
Cost
Approved Cost
Excess Cost
Recovery Revenue
65 %
Profit Oil
Contractor Share
Government Share
30 %
70 %
Contractor
Share of
Revenue
Government
Share of
Revenue
Typical PSC Structure in Egypt (Illustrative)
PSC
Revenue
(166.1 $mm)
35 %
Eligible
Recoverable
Cost
(58.1 $mm)
Approved Cost
(18.3 $ mm)
Excess Cost
Recovery Revenue
(39.8 $mm)
65 %
Profit Oil
(147.8 $mm)
Contractor Share
(44.3 $mm)
Government Share
(103.5 $mm)
30 %
70 %
Contractor
Share of
Revenue
(62.7 $ mm,
38%)
Government
Share of
Revenue
(103.5 $mm,
62%)
Gross Oil Production: 1.96 mm b
Realized Price: 84.9 $/b
Total Revenue = 166.1 $ mm
(108.0 $mm)
Interactive Check using a live working example
Open the associated excel file Understanding Tax Barrels.xlsm
The case assumes a field with ongoing production since last few years (5-6 years)
Calculations have been simplified to keep focus on tax barrels. Real life examples are not that simple.
Press Show Production & Tax Bbls Chart and try to guess the effect on Production and Tax Bbls distribution
before you adjust the spinners in Row 17.
Figure for Base Case is produced below
NOTE: Macro Enabled Excel File can not be uploaded. To have an access to the file, you may write me at
hdua01@gmail.com