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1976 MCA
At EGPC's request, in early 1975, EGPC and Amoco Egypt began
preliminary discussions regarding the conversion of the three
existing 50/50 agreements into a single production sharing
agreement that came to be known as the merged concession
agreement or MCA.4 With respect to EGPC and the ARE, the
compelling force for the new agreement was the rapid worldwide
increase in oil prices that had created unanticipated profits for
Amoco Egypt under the 50/50 agreements and thus a desire by EGPC
and the ARE to modify the profit split, as well as a desire to
adopt the production sharing format being used in the Arab
community.
By letter dated March 3, 1975, EGPC formally requested that
Amoco Egypt begin negotiating the terms of a production sharing
agreement that would replace the 50/50 agreements. EGPC required
that the new agreement follow the production sharing format;
Amoco Egypt did not have the option of remaining with the 50/50
or "participation" agreement format.
4 The 50/50 agreements are not to be confused with the 1974
production sharing agreements that were not replaced by the MCA.
These production agreements have not been dealt with separately
by the parties. To the extent that they may be involved in the
years before us (as to which the record is unclear), our
conclusions in respect of the issues arising out the MCA will be
applicable.
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