The Research On Profit Distribution Of Unconventional Gas PSC

In the international oil and gas corporation projects, production sharing contract hasbeen the primary contract among other international petroleum contracts. The essenceof the PSC is that the resource ownership of mineral resources belonged to the hostedcountry, the foreign oil&gas giants sign the contract to undertake exploration,development and production costs, using the production of oil and gas to recoverycost and gets gains. PSC models differ from projects to projects. However, CBM’sPSC contract of our country is greatly different from the PSCs of conventionalresources, such as cost index, economic parameter, and contractual parameter. Startedin the late90’s, the CBM foreign corporation has been more mature compared withthe foreign corporation projects of shale gas. Nevertheless, compared with theconventional resources PSC contracts, most obvious insufficient is the profitdistribution, which adopts the fixed ratio. The fixed profit distribution ratio cannotchange according to gas output and price. This may make foreign contractor gainhuge amount of profit, causing harm to the host country and drainage of resources.Mainly using IRR analysis of technical economics and comparative approach, thearticle firstly investigated the differences between conventional and unconventionaloil and gas PSC contracts, summarizing the CBM PSC features, short comings ofprofit distribution. Then using the cash flow analytical method, the CBM profitdistribution model is established. Finally, using the case analysis, the article gives adepiction on the validity and suitability of the model and reminds the model should bemodified circling the complementing of the index system.