Deepwater Production Handling Agreements

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Deepwater Production Handling Agreements
THEMES AND CONCEPTS

• Background
• Case for action
• Objective
• Course of Action/Timing
• Drafting Team
• Drafting Process
• Guiding Principles
• Status
• Model Form PHA Major Components
• Select Themes Concepts
• Facilities
• Services
• Fees Expenses
• Capacity
• Metering Allocation
• Transportation

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Deepwater Production Handling Agreements
CASE FOR ACTION

• PHA Evaluations, Negotiations Contractual
  Agreements are Complex
• No Consistency Framework Relative to the Terms
  Conditions of Contractual Agreements (i.e. Lack
  of Standardization)
• Negotiations are Time Resource Consuming

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Deepwater Production Handling Agreements
OBJECTIVE

• Facilitate efficiency in terms of becoming more
  efficient with time and resources
• Standardize, but simplify, PHA to extent possible
  (recognizes that each PHA is unique with its own
  set of issues/circumstances)

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Deepwater Production Handling Agreements
COURSE OF ACTION/TIMING

• Action Est. Completion
• Create PHA Drafting Team 02/2003
•     Assemble Example Forms 03/2003
•        Develop Base Model Form PHA 03/2004
•        OCS Committee Review 05/2004
•        Edit Period 07/2004
•        Industry Review 09/2004
•        Edit Period 11/2004
•        OCS Committee Endorsement 12/2004
• AAPL Forms Committee Approval 12/2004

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Deepwater Production Handling Agreements
PHA MODEL FORM DRAFTING TEAM
Drafting Consulting ChevronTexaco
ExxonMobil Shell Exploration Production
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Deepwater Production Handling Agreements
DRAFTING PROCESS

• Assemble and review example forms
• Identify common/unique themes
• Select base form to develop preliminary model
  form
• Develop Guiding Principles
• Draft Major Components
• Draft Boiler Plate Language

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Deepwater Production Handling Agreements
GUIDING PRINCIPLES

• Generic as Possible
• Broadly Applicable
• Simplified in Terms of Readability
• Provide basis for making business decisions
• (i.e. distinguish business decisions
  from model form decisions)
• Can be used as a catalyst for a Shelf Model Form
  PHA

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Deepwater Production Handling Agreements
STATUS
Current Activity

• Drafting of Major Components

Remaining Activities

• Complete Drafting of Major Components
• Drafting of Boiler Plate Language

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Deepwater Production Handling Agreements
MAJOR PHA COMPONENTS

• Facilities Design, Construction, Operation, Use
  and Abandonment
•  Facility Ownership Funding
• Services
• Fees Expenses
• Processing Handling Capacity
• Production/Fuel Measurement Allocation
• Downstream Transportation
• Suspension of Operations
• Term
• Tax, Royalty Insurance
• Liability Indemnification

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Deepwater Production Handling Agreements
Theme Facilities
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Deepwater Production Handling Agreements
Theme Services

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Deepwater Production Handling Agreements
Theme Fees Expenses
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Deepwater Production Handling Agreements
Theme Capacity
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Deepwater Production Handling Agreements
Theme Capacity
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Deepwater Production Handling Agreements
Theme Metering and Allocation
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Deepwater Production Handling Agreements
Theme Metering and Allocation
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Deepwater Production Handling Agreements
Theme Gathering Transportation
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Deepwater Production Handling Agreements
Theme Gathering Transportation