Regulatory Restrictions and Royalty Payments in DST Operations

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Parts of the Brazilian Regulation concerning DST operations is currently under review, and the local operators have been invited to provide inputs before final publication.

One of the key points under revision are clauses that demand the payment of royalties for all produced hydrocarbons in DSTs performed during the Production Phase of the Contracts (i.e. after the field has been declared commercial). This applies even if these hydrocarbons are burned (as they almost always are here in offshore operations).

A second point of interest is the time limitation imposed to the operations, with DSTs here being restricted to 72 hours of hydrocarbon flow (independent of rate).

With this in mind, I would like to ask the members whether these practices are also encountered in their other countries of operation. More specificallty, I would like to know:

1) Do burnt hydrocarbons from DSTs require royalty payments in other countries?

2) Are there time restrictions to the duration of DSTs?

3) Are there any other major types of restrictions for DST operations, such as not allowing for hydrocarbons to be burned?



Ralph Piazza
asked Nov 13, 2019 in WTN by Ralph Piazza (120 points)

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