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In addition to Egyptian income taxes, EGPC and Amoco Egypt
were each subject to an additional amount or "surtax" under the
50/50 agreements designed to assure that the ARE received 50
percent of each party's respective net profits. If the amount
otherwise paid to the ARE, in the form of royalties, income
taxes, and other payments, was less than 50 percent of net
profits, Amoco Egypt and EGPC were required to pay to the ARE
such difference by way of the surtax, to make the total of all
payments equal to 50 percent of total net profits. If the total
amount otherwise paid to the ARE exceeded 50 percent of net
profits, Amoco Egypt and EGPC were exonerated and relieved from
any obligation with respect to the excess, or could elect to
credit such excess against future obligations to the Government.
In February 1965, Amoco Egypt's exploration efforts in the
Gulf of Suez, pursuant to the Gulf of Suez concession agreement,
resulted in the discovery of the El Morgan field. Production
from the El Morgan field, the largest oil find in the ARE to
date, began in February 1967. In the years after the discovery
of the El Morgan field, Amoco Egypt made additional petroleum
discoveries under its 50/50 concession agreements.
Shift to Production-Sharing Format
In 1970, the ARE and EGPC entered into a concession
agreement with a Japanese corporation, the North Sumatra Oil
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Last modified: May 25, 2011