188体育

For unitisations and subsequent redeterminations, the methods for calculating the cash adjustments to bring expenditure into line with oil entitlement are normally specified in the agreement. The adjustments normally include some, or all, of the following elements:

1. A reimbursement of historic costs incurred on exploration, drilling, wells, and (for redeterminations particularly) platforms, pipelines and onshore industrial buildings.
2. 鈥業nterest鈥�, either described as such or calculated by reference to interest rates on the costs in a.
3. A 鈥榯hird element鈥� variously referred to as 鈥榠ndexation鈥�, 鈥榗ompensation for disproportionate risk borne鈥� or 鈥榙isproportionate future cost sharing鈥�.

Concepts such as 鈥榠ndexation鈥� and 鈥榗ompensation for disproportionate risk borne鈥� are not entirely clear cut. This written, 鈥榠ndexation鈥� might be seen as an acknowledgement of the purchasing power in money of the day linked to a readily accessible index which can apply to historic as well as future development costs. 鈥楥ompensation for disproportionate risk borne鈥� might be seen as referring to situations where a risk has been taken on say a complex geological structure, or on say a leading edge development scheme, where the prospects of a failure were high, but which ultimately achieved success.