On structuring offshore hydrocarbon production sharing contracts: Lebanon's case

Ali Yassine, Bacel Maddah, Najat Younes

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    5 Scopus citations

    Abstract

    Interest in the Lebanese offshore hydrocarbon potentials has recently increased, especially after the discoveries in neighbouring countries that share the same geological offshore basin with Lebanon. In this article, we present a framework for structuring and analysing offshore hydrocarbon contracts. Our objective is to assist governments in formulating and managing the contracting process for hydrocarbon assets. The proposed framework is based on a benchmark study (ie database) of offshore production sharing contracts (PSCs). Contract profiling is then performed using three factors: political and economic risk, reserves status and water depth. Based on this database and on contract profiling, we propose plausible ranges for the parameters of potential PSCs; particularly, for Lebanon. We also utilise a simple 'take' model for PSCs to perform sensitivity analysis in order to identify critical contract parameters that have the highest effect on the government share. Additionally, our research statistically tests the significance of the three contract profiling factors on the PSC parameters.

    Original languageEnglish
    Pages (from-to)83-106
    Number of pages24
    JournalJournal of World Energy Law and Business
    Volume6
    Issue number2
    DOIs
    StatePublished - Jun 2013

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