Production Sharing Contract (PSC) Extension Evaluation for Joint Authority Contract Area – Techno-Commercial Evaluation

Abstract The PMXXX Production Sharing Contract (PSC) is set to expire in December 2027. The host authorities (HA) and Production Sharing (PS) Contractors have initiated PSC extension exercise, five (5) years prior to the PSC expiry. This proactive measure aims to comprehensively assess the current performance of the PSC whilst ensuring continued efficiency and productivity. A critical component of the PSC extension evaluation involves scrutinization of the remaining reserves. This analysis aims to identify untapped reserves that can be monetised to generate future value to the PSC. These identified reserves will also form the basis of the Minimum Work Commitment (MWC) to be imposed for the PSC extension. In addition to that, the PSC extension exercise will also assess the potential nearby fields. This assessment seeks to uncover additional value that could be integrated into the PSC, enhancing its overall attractiveness and feasibility. An economic evaluation will be conducted on all prospective projects within the scope of the PSC. This evaluation will determine the viability of the existing fiscal terms. Should the current fiscal terms prove unattractive, this will trigger a revision of the fiscal terms to ensure viability of development works and overall healthiness of the PSC. Various internal technical reviews are required to endorse the future plan which cover exploration and development activities, production optimization, and management of abandonment liabilities. Once technical scopes have been agreed, the focus will be towards achieving alignment with PS contractors on technical work required for the future projects. Overall, this comprehensive PSC extension evaluation will ensure that PMXXX PSC remains a beneficial arrangement to all parties, fostering continued investments and developments in the region. The proactive approach underscores the commitment to maximizing resource utilization and economic gains while maintaining operational excellence.