Part 19
Disposal of Production
Recall that under a production sharing contract, costs are deducted from the value of production to arrive at profit oil to be shared between the contractor and the Government of Guyana in the proportion set out in the contract: Article 11.6. The contractor is also permitted to use as much production as needed in the operations and within the transportation and terminal system.
If the reader thinks that the system is becoming complicated and therefore subject to dispute, it gets even trickier since there may also be some third party usage of the transportation terminal systems. Where there is such third party usage, the quantities so used or lost outside of the contract area is proportionate to the aggregate use of the that system and the value is excluded from any calculations under Article 11.
