IVZ media thread, page-713

Dark Lord I think it needs to be said, one needs to be careful when talking about the % the government might get.
My very loose understanding is that these % relate to profit oil and gas.
I will put up the PSA from Mozambique with SASOL for reference. Its very complicated and not as simple as X % IMO.


Article 9 Cost Recovery and Production Entitlement
9.1 The Concessionaires shall bear and pay all costs incurred in carrying out the Petroleum
Operations in which the Concessionaires participate, and the Concessionaires shall recover
such costs within the limit of 60 % of the Disposable Petroleum ("Cost Petroleum"), to the
extent permitted by the EPCC including the provisions of Annex "C" of this EPCC, (hereinafter
referred to as "Recoverable Costs"), and shall be remunerated exclusively by means of an
entitlement to quantities of Petroleum to which the Concessionaires are entitled in
accordance with the terms of the Special Tax Law (Law no. 27/2014 of 23 September, as
amended by Law No. 14/2017 of 28 December) and of the respective Regulations approved
by Decree no. 32/2015 of 31 December and the IRPC code (Law No. 34/2007 of 31
December).
9.2 a) For the purpose that the Government or a Concessionaire may elect to take Profit
Petroleum in kind, the Concessionaires shall, for accounting and reporting purposes, record
Cost Petroleum separately:
i. in respect of each Development and Production Area; and
ii. in the form of liquids and gas, on a pro-rata basis relative to the volumes of
Petroleum Produced.
b) For the purposes of this EPCC, condensate shall be taken in Crude Oil or Natural Gas on the
basis of its character at the Delivery Point.
9.3 The Cost Petroleum for any quarter shall be calculated in the manner aforesaid shall be
increased by:
a) the amount of any contributions made by the Concessionaires into the Decommissioning
Fund during such quarter; and
b) the costs incurred by the Concessionaires during such quarter to implement an
approved Decommissioning Plan prepared pursuant to applicable law save to the extent
that, such costs have been funded by withdrawals from the Decommissioning Fund; and
c) provided that in no event shall the Cost Petroleum exceed 60 % of the Disposable
Petroleum.
9.4 Costs, to the extent permitted by the provisions of Annex "C" of this EPCC, approved by the
competent authority, subject to Article 9.6, shall be recovered from Cost Petroleum:
a) in respect of costs attributable to Exploration as stipulated in Annex "C" of this EPCC
(hereinafter referred to as "Exploration Costs"), by the recovery of the full amount in the
16 EPCC PT5-C

fiscal year in which they were incurred or in the fiscal year in which Commercial
Production commences, whichever is later; and

b) in respect of the amount of Development and Production Capital Expenditures
stipulated in Annex "C" of this EPCC incurred during each fiscal year by the recovery of
such Capital Expenditure, at a maximum yearly rate of twenty five per cent (25 %) on a
linear depreciation basis beginning in the fiscal year in which such amount is incurred or
in the fiscal year in which Commercial Production commences, whichever is later.
9.5 Costs, mentioned in article 9.4, incurred by Concessionaires to prepare an approved
Decommissioning Plan shall be considered, for the purpose of Corporate Income Tax (IRPC),
as operating costs pursuant to letter e) of article 19 of Law no. 27/2014 of 23 September.
9.6 The quantity of Cost Petroleum to which the Concessionaire is entitled in any year shall be
established on the basis of the value of the Petroleum Produced during such year, and
determined in accordance with applicable law and this EPCC.
9.7 The "Profit Petroleum", shall be shared between the Government and the Concessionaires
according to the following scale:

Government's Concessionaires'


R-Factor Portion Portion



Less than 1 15% 85%
Equal to or greater than 1 25% 75%
And less than 1.5
Equal to or greater than 1.5 35% 65%
and less than 2.0
Equal to or greater than 2 and 50% 50%
less than 2.5
Equal to or greater than 2.5 60% 40%


9.8 The Concessionaires, excluding ENH or a Permitted Assignee, shall pay all costs properly
incurred under this EPCC in relation to the State Participating Interest of 30 % (thirty
percent) Participating Interest (herein referred to as "Carry") subject to the following
conditions:

(a) In the event of a third party, other than an entity holding a State Participating
Interest (Permitted Assignee), has acquired a Participating Interest in the EPCC from any
Concessionaire other than an entity holding a State Participating Interest, such third party
shall be obliged to take over a proportionate share of the Carry.

16
17 EPCC PT5-C


(b) A State Participating Interest totally or partially transferred to a non-Permitted
Assignee may only become effective provided all outstanding amounts as set out in Article



9.8 (e) relating to the transferred interest and not yet reimbursed to a Concessionaire subject
to Carry have been paid by the non-Permitted Assignee to the Concessionaires proportionally
to their respective Participating Interests. The share of any future Carry, to be paid by each
Concessionaire subject to Carry, shall be calculated according to the new composition of
Participating Interest of the Concessionaires subject to Carry.
(c) The Carry shall be limited to all costs incurred by the Concessionaire in discharging
their obligations under this EPCC, up to and including the date upon which the Development
Plan has been approved.
(d) The Carry shall be used exclusively to pay for costs properly incurred under this EPCC
in relation to the State Participating Interest. Save for in respect of a transfer to a Permitted
Assignee, ENH may not assign directly or indirectly the benefits derived under the Carry. Any
transfer of a Participating Interest subject to the Carry requires the prior approval of
MIREME.
(e) From the date of commencement of Commercial Production, ENH and any entity
designated by the Government to manage the State Participating Interest shall reimburse in
full the Carry in cash or in kind to the Concessionaires (other than ENH or a Permitted
Assignee). Such reimbursement shall be calculated as and taken from the Cost Petroleum of
ENH or a Permitted Assignee having benefited from the Carry. All Carry amounts owed up to
approval of the first Development Plan shall be subject to payment of interest in United
States dollars, compounded quarterly, calculated at the LIBOR rate plus one (1) percentage
point, from the date such costs are incurred by the Concessionaires (other than ENH or a
Permitted Assignee) until reimbursed in full.
9.9 The Concessionaires may re-inject Natural Gas which is not (i) taken by Government pursuant
to applicable law, (ii) used for Petroleum Operations or processed and sold by the
Concessionaires, or (iii) used by the Concessionaires for Concessionaires' purposes, and the

costs of such re-injection of Natural Gas shall be cost recoverable.
In respect of operating costs attributable to Petroleum Operations stipulated as Operating
Costs in Annex "C" to this EPCC (hereinafter referred to as "Operating Costs") (including any
contributions into the Decommissioning Fund pursuant to applicable law, and including any
costs incurred by the Concessionaires to implement an approved Decommissioning Plan save
to the extent, in either case, that such costs have been funded by withdrawals from the
Decommissioning Fund), by the recovery of the full amount in the calendar year in which
they were incurred.