What is meant by concession agreement?

What is meant by concession agreement?

Key Takeaways. A concession agreement is a contract that gives a company the right to operate a specific business within a government’s jurisdiction or on another firm’s property, subject to particular terms.

What is the difference between PSC and JV?

In JVs agreement, oil and gas operations funds are contributed by JV partners in proportion to their participating interests. While under PSCs, FOCs bear all the risks and costs of exploration and production. Though government participates on commercial discovery.

What is a concession in oil and gas?

1. n. [Oil and Gas Business] A grant extended by a government to permit a company to explore for and produce oil, gas or mineral resources within a strictly defined geographic area, typically beneath government-owned lands or lands in which the government owns the rights to produce oil, gas or minerals.

What is a concession agreement India?

A concession agreement is an agreement between a Government Authority and a Private entity, through which the Government grants certain rights to the Private entity for a limited period of time. These agreements are common in the development of infrastructural projects under the Public-Private Partnership (PPP) model.

What are the different types of concession agreement?

There are different types of concession contracts, including: ex-leasing, franchise, build- operate-transfer (BOT) etc. Private finance initiatives (PFIs) may also be considered similar to concessions.

What is PSC model?

Production Sharing Contract (PSC) is a term used in the Hydrocarbon industry and refers to an agreement between Contractor and Government whereby Contractor bears all exploration risks, production and development costs in return for its stipulated share of (profit from) production resulting from this effort.

What is modern concession?

It is called Modern Concession because unlike the old traditional concession, only Royalties and Taxes are paid to the host government, but this hybrid system allows the host government, some participating interests for which payment has to be made towards capital development costs, as the practice under Joint Ventures …

What is a PSA in oil and gas?

1. Production sharing agreement (PSA) is a contract between one or more investors and the government in which rights to prospection, exploration and extraction of mineral resources from a specific area over a specified period of time are determined.

What is traditional concession?

Traditional concession International Oil Companies were granted exclusive right over huge choice areas (40-75 years) to explore, produce, transport, and dispose petroleum. nearly amounting to sovereign rights. Royalty was paid to the government.

What are concessions in construction?

In the built environment, a concession is a negotiated contract that grants rights to a company of a government, local authority or other legal entity.

What are the disadvantages of concession?

Disadvantages of a concession agreement

• It requires closer regulatory oversight by the government.
• It creates contingent liabilities to the government, especially if the term of the project is long.
• It can have underlying fiscal costs to the government.

What is the difference between a PPP and a concession?

Concessions are contracts where the consideration for the works or services to be carried out consists either solely in the right to exploit the work or service, or in this right together with payment. The acronym PPP refers to Public-Private Partnership.

What is concession in construction?

In a concession the concessionaire typically obtains most of its revenues directly from the consumer and so it has a direct relationship with the consumer. A concession covers an entire infrastructure system (so may include the concessionaire taking over existing assets as well as building and operating new assets).

How does a production sharing agreement work?

A production sharing agreement (PSA) is a legal contract between one or more investors and any governmental entities to lay out the rights, duties, and obligations of each party for exploration, development, and production of mineral resources in a specific location for a specific time.

What is production sharing contract and the four main provisions?

What is a mineral Production Sharing Agreement?

(1) Mineral Production Sharing Agreement (MPSA) – a mineral agreement wherein Government shares in the production of the Contractor, whether in kind or in value, as owner of the minerals. In return, the Contractor shall provide the necessary financing, technology, management and personnel for the mining project.