{"id":1094,"date":"2014-05-28T12:23:24","date_gmt":"2014-05-28T09:23:24","guid":{"rendered":"http:\/\/oilnewskenya.com\/?p=1094"},"modified":"2015-09-04T09:18:54","modified_gmt":"2015-09-04T09:18:54","slug":"key-features-of-the-current-kenyan-model-of-production-sharing-contract","status":"publish","type":"post","link":"https:\/\/www.oilnewskenya.com\/index.php\/key-features-of-the-current-kenyan-model-of-production-sharing-contract\/","title":{"rendered":"Key features of the current Kenyan model of production sharing contract"},"content":{"rendered":"<p><span style=\"color: #222222;\">[twitter-follow screen_name=&#8217;oilnewskenya&#8217;]<\/span><\/p>\n<p>Source: <a href=\"http:\/\/deloitteblog.co.za\/wp-content\/uploads\/2014\/05\/The-Deloitte-Guide-to-Oil-and-Gas-in-East-Africa.pdf\">Deloitteblog<\/a><\/p>\n<ul>\n<li>Negotiation of an initial exploration period with the possibility to extend this twice.<\/li>\n<li>An agreed percentage of the contract area is to be surrendered at the end of each exploration period.<\/li>\n<li>In the event of a commercial development the total contract duration is negotiable.<\/li>\n<li>Surface fees are provided for but are negotiable.<\/li>\n<li>Annual contributions to the Ministry of Energy training fund.<\/li>\n<li>The PSC does not provide for bonus payments or royalties.<\/li>\n<li>A cost recovery cap per period is envisaged but the amount of this is also negotiable.<\/li>\n<li>Capital costs are subject to recovery at a rate of 20% per annum (straight-line).<\/li>\n<li>The sharing of profit oil is based solely on production volumes with the maximum state share achieved when production exceeds 100,000 barrels per day. The state share may be taken in cash or in kind.<\/li>\n<li>Separate rules for sharing gas production are not provided.<\/li>\n<li>The state\u2019s share of profit oil is inclusive of income tax (see below for more detail).<\/li>\n<li>The model provides for an additional allocation of profit oil to the state, triggered when the oil price exceeds a specified threshold.<\/li>\n<li>In the event of a development, the government has a right to participate directly or via its designee (presumably this would be NOCK). The percentage share to be transferred is subject for negotiation. The PSC envisages that this will not entail reimbursement of costs up to the adoption of the development plan, but the government or its designee will be obliged to fund the respective share of costs thereafter, no carry arrangement being envisaged.<\/li>\n<li>The contractor is obliged to supply the domestic market out of its share of production in accordance with instructions from the Minister. This will be at market price.<\/li>\n<li>The contractor and its subcontractors will be entitled to import goods and equipment for petroleum operations free from customs duties.<\/li>\n<\/ul>\n<p>[twitter-follow screen_name=&#8217;oilnewskenya&#8217;]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[twitter-follow screen_name=&#8217;oilnewskenya&#8217;] Source: Deloitteblog Negotiation of an initial exploration period with the possibility to extend this twice. An agreed percentage of the contract area is to be surrendered at the &hellip; <a href=\"https:\/\/www.oilnewskenya.com\/index.php\/key-features-of-the-current-kenyan-model-of-production-sharing-contract\/\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":2,"featured_media":870,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[6,7,11],"tags":[579,1252,1584,2007,2092,2521],"class_list":["post-1094","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-by-others","category-oil-politics","category-top-news","tag-deloitte","tag-kenya","tag-ministry-of-energy","tag-petroleum-energy-department","tag-psc","tag-the-petroleum-exploration-and-production-act-cap-308","entry"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/04\/blocks.jpg?fit=468%2C628&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p5JWkQ-hE","jetpack-related-posts":[{"id":3137,"url":"https:\/\/www.oilnewskenya.com\/index.php\/components-production-sharing-contract-kenya\/","url_meta":{"origin":1094,"position":0},"title":"Components of Production Sharing Contract in Kenya","author":"","date":"July 13, 2015","format":false,"excerpt":"Licensing of petroleum exploration blocks, is governed by the Petroleum (Exploration and Production) Act Chapter 308 of the Laws of Kenya. All contracts are based on a Model Production Sharing Contract (PSC) issued as a schedule to the Regulations issued under Section 6 of the Act. The signed Production Sharing\u2026","rel":"","context":"In &quot;PSCs&quot;","block_context":{"text":"PSCs","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/pscs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2015\/05\/latest-exploration-map.png?fit=564%2C549&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2015\/05\/latest-exploration-map.png?fit=564%2C549&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2015\/05\/latest-exploration-map.png?fit=564%2C549&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":2922,"url":"https:\/\/www.oilnewskenya.com\/index.php\/kenya-oil-gas-upstream-sector-fact-file-shortened\/","url_meta":{"origin":1094,"position":1},"title":"Kenya Oil and Gas (upstream) sector fact file &#8211; shortened","author":"","date":"May 15, 2015","format":false,"excerpt":"Source: Ministry of Energy and Petroleum 1950-1992: \u00a030 wells drilled by international oil companies in Kenya\u2019s sedimentary basins. Two more wells drilled in the period stretching to 2010. None of them was a discovery. Basically 1992 to 2005 was a dormant period that saw zero wells drilled. 2012: Ngamia 1\u2026","rel":"","context":"In &quot;Top News&quot;","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/04\/human-rights.jpg?fit=668%2C444&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/04\/human-rights.jpg?fit=668%2C444&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/04\/human-rights.jpg?fit=668%2C444&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":560,"url":"https:\/\/www.oilnewskenya.com\/index.php\/apache-departs-from-psc-with-pancontinental-in-block-8\/","url_meta":{"origin":1094,"position":2},"title":"Apache departs from PSC with Pancontinental in Kenya&#8217;s Block L8","author":"Samuel Kamau Mbote","date":"February 21, 2014","format":false,"excerpt":"[twitter-follow screen_name='oilnewskenya'] Apache has opted out from the production sharing agreement (PSC) with Pancontinental Oil and Gas of Kenya's offshore Block L8 saying it will not participate in any further discussions in the new PSC after the former agreement expired. Apache had owned 50 percent in the agreement, Origin owned\u2026","rel":"","context":"In &quot;Oil Politics&quot;","block_context":{"text":"Oil Politics","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/oil-politics\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/02\/pancontinental-completes-nanaa-seismic-survey-offshore-kenya.jpg?fit=708%2C479&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/02\/pancontinental-completes-nanaa-seismic-survey-offshore-kenya.jpg?fit=708%2C479&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/02\/pancontinental-completes-nanaa-seismic-survey-offshore-kenya.jpg?fit=708%2C479&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/02\/pancontinental-completes-nanaa-seismic-survey-offshore-kenya.jpg?fit=708%2C479&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":15382,"url":"https:\/\/www.oilnewskenya.com\/index.php\/kenya-gulf-energy-granted-major-concessions-in-revised-turkana-oil-contract\/","url_meta":{"origin":1094,"position":3},"title":"KENYA: Gulf Energy Granted Major Concessions  in Revised Turkana Oil Contract","author":"","date":"December 2, 2025","format":false,"excerpt":"The Government of Kenya has signed a far-reaching Addendum to the Production Sharing Contract (PSC) for the Turkana oil blocks, handing Gulf Energy E&P B.V. significant new fiscal and operational advantages as the company moves toward developing Blocks T6 and T7. The Addendum signed in late November 2025 between the\u2026","rel":"","context":"In &quot;Countries&quot;","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2024\/03\/Tullow-Oil-Kenya.jpg?fit=800%2C450&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2024\/03\/Tullow-Oil-Kenya.jpg?fit=800%2C450&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2024\/03\/Tullow-Oil-Kenya.jpg?fit=800%2C450&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2024\/03\/Tullow-Oil-Kenya.jpg?fit=800%2C450&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":4691,"url":"https:\/\/www.oilnewskenya.com\/index.php\/kenya-to-auction-17-new-oil-exploration-blocks-in-2017\/","url_meta":{"origin":1094,"position":4},"title":"Kenya to auction 17 new Oil Exploration Blocks in 2017","author":"","date":"May 16, 2016","format":false,"excerpt":"The Ministry of Energy and Petroleum has in a gazette notice said it has created an additional 17 new exploration blocks to the existing 46 blocks that had earlier been vacant in the country\u2019s first competitive round. The 17 new blocks have been carved out of the 46 blocks as\u2026","rel":"","context":"In &quot;PSCs&quot;","block_context":{"text":"PSCs","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/pscs\/"},"img":{"alt_text":"Petroleum Exploration Block Map of Kenya","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2016\/05\/Petroleum-Exploration-Block-Map-of-Kenya-300x289.png?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":11472,"url":"https:\/\/www.oilnewskenya.com\/index.php\/egypt-apa-corporation-announces-ratification-of-modernized-production-sharing-contract\/","url_meta":{"origin":1094,"position":5},"title":"EGYPT: APA Corporation Announces Ratification of Modernized Production Sharing Contract","author":"","date":"December 30, 2021","format":false,"excerpt":"APA Corporation has announced the signing, by authority of Egyptian President H.E. Abdel Fattah El Sisi, of the previously announced agreement to modernize and consolidate the company\u2019s current Production Sharing Contracts (PSCs) with Egypt\u2019s Ministry of Petroleum and Mineral Resources (MOP) and the Egyptian General Petroleum Corporation (EGPC). The effective\u2026","rel":"","context":"In &quot;Countries&quot;","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/12\/Apache-Egypt.png?fit=766%2C495&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/12\/Apache-Egypt.png?fit=766%2C495&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/12\/Apache-Egypt.png?fit=766%2C495&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/12\/Apache-Egypt.png?fit=766%2C495&ssl=1&resize=700%2C400 2x"},"classes":[]}],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/1094","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/comments?post=1094"}],"version-history":[{"count":1,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/1094\/revisions"}],"predecessor-version":[{"id":3376,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/1094\/revisions\/3376"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/media\/870"}],"wp:attachment":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/media?parent=1094"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/categories?post=1094"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/tags?post=1094"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}