Asia Chapter Event "Non-Fiscal Clauses in Host Government Contracts that are Disincentives to Investment: Can the Loss be Quantified?"
6:30 - 8:30 p.m. Monday, April 1, 2019
Brewerkz | Riverside Point, Singapore, 069692
Christopher Moore, Managing Director, Moyes & Co.
Join the Asia Chapter for "Non-Fiscal Clauses in Host Government Contracts that are Disincentives to Investment: Can the Loss be Quantified?" Comparisons of Host Government Instruments (licenses, concessions, PSCs, etc.) generally concentrate on the fiscal terms, particularly government take, as the principal drivers of value. In this presentation, other clauses that may have a significant impact on the value ultimately realized from executing an upstream project are discussed, with special reference to examples from S.E. Asia. Examples illustrate the impact on investment metrics and market values of specific contract language. While similar principles may be incorporated in a wide range of contracts, subtle, and some not so subtle, differences arise from the detailed language used.
Some important issues are obvious, including the scope of state participation rights, performance bonds, the effect of local content requirements and the nature of the rights to natural gas and the related issue of natural gas pricing. Some obviously add to, or detract from, value but are difficult to quantify, such as assignment and change of control provisions, and stabilization clauses.
Perhaps the most important, but frequently overlooked area that can significantly impact contract economic performance is governance. This includes the role of the management committee, the scope of its responsibilities, and its voting and dispute resolution procedures. Central to the economic performance of both PSCs and tax/royalty arrangements are the rules for cost recovery and tax deductibility. State approval, or at least oversight, of the work programs and budgets and any accompanying audit rights, may offer the state significant leverage in modifying the contractor’s anticipated economic benefits.
Registration is complimentary for members and S$25 for non-members, payable at the door. Please RSVP to Bill Lafferrandre at Bill.lafferrandre@SDRasia.com and +65 8124 5068 or Paul Greening at Paul.Greening@akingump.com and +65 6579 9070.
Special thanks to event-sponsors: