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Cambodian
National Petroleum Authority "CNPA" was established
in accordance with Royal Decree no. ChorSor/RorTorkor
0198/020, dated 22 January 1998, with the important role
and responsibility to manage and develop both upstream
and downstream activities within the petroleum sector. |
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CNPA
is under the direct supervision of the Prime Minister
and headed by a Chairman, H.E. Sok An, is currently senior
minister in charge of the Council of Ministers. The Chairman
has the full authority necessary to oversee the CNPA 's
work performance and responsibility for facilitating petroleum
operations, both upstream and downstream, policy-making,
planning and drafting legislation in relation to petroleum
management and development in the country. |
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Since
no law was in force at the time, the main instrument for
the regulation of upstream petroleum activities in Cambodia
is the 1991's Petroleum Regulations, under which production
sharing contract (PSC) is issued to set forth terms and
conditions for contractors to conduct petroleum exploration
and production in the country. |
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Model
Production Agreement |
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Provisions
of a production sharing contract includes items such as
definition of exploration blocks; duration of exploration
and production; minimum work and expenditure obligation;
basic rights, duties, and privilege of contractor; fiscal
regime (see next page); sanctity of contract; and arbitration. |
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In
addition to royalty and petroleum income tax, a production
sharing contract also contains a clause on special advantages
that a contractor may offer to the government in return
for being awarded the contract. Those advantages normally
offered are items such as scholarships, training, grant
to government agencies or educational institutions, signature
bonus, production bonus, or state joint venture participation. |
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Production
Sharing Contract Flow Diagram |
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Fiscal
Regime |
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In
brief, the fiscal regime provided for in the 1991's Petroleum
Regulations consists of four elements: |
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| Royalty
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: |
12.5% |
| Cost
Recovery |
: |
70
to 80% for oil based on negotiation |
| Profit
Sharing |
: |
calculated
after royalty and cost recovery |
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Crude
Oil
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Production,
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Percentage
(%)
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(bopd)
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Government-
Contractor
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Up
to 10.000
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42
- 58
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10,001-
25,000
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47
- 53
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25,001-
50,000
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52
- 48
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50,001-
75,000
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57
- 43
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75,001-
100,000
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62
- 38
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Over
100,000
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67
- 33
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Natural
Gas
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Production,
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Percentage
(%)
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MMm3/day
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Government-
Contractor
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Up
to 5
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40
- 60
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5.1
- 10
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45 - 55
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10.1-
15
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50 - 50
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Over
15
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60 - 40
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Income
Tax : 25 to 50 % levied on the contractor's profit
sharing. |
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*
All infrastructures and equipment imported for petroleum
operations are exempted from all duties and taxes leviable
under prevailing laws. |
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