Hanbo Energy Co. Ltd.'s production sharing agreement with Jordan's Natural Resources Authority calls for the drilling of five wells during three 2 year exploration terms (OGJ, Aug. 10, p. 72).
The first two year exploration term covering the Seoul company's 15,592 sq km Risha area and 6,171 sq km Sirhan areas calls for $10 million in spending on seismic acquisition and reprocessing as necessary and the drilling of two wells.
Requirements are $4 million and two wells in the second exploration term and $3 million and one well in the third.
Jordan has production sharing agreements in force with Amoco, Hunt, and Petrofina.
PSC TERMS
Hanbo is to pay the government a first shipment bonus of $1 million plus production bonuses of $1 million at 50,000 b/d, $1 million at 100,000 b/d, $4 million at 150,000 b/d, and $6 million at 200,000 b/d.
The contractor is required to fund technical and training expenses of $50,000/year during exploration and $100,000/year during production.
No royalties are applied, but the contractor is subject to Jordanian standard income tax laws.
There is a cost oil limit of 45%, and exploration, development, and operating expenses (carried forward) are recovered in the year incurred.
Hanbo's share of produced oil would be 35% to 60,000 b/d, 30% of 60,000-100,000 b/d, and 25% of more than 100,000 b/d.
Gas cost recovery limit is 50%, and the contractor's share of gas production is 40%.
The agreement is in final ratification stages before becoming Jordanian law.
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