PSC Terms
On August 6, 2007, the Kurdistan Parliament approved the Kurdistan Region Oil & Gas Law. WesternZagros’ activities under its Production Sharing Contract ("PSC") fall within the jurisdiction of the Kurdistan Regional Oil & Gas Law.
Under the terms of WesternZagros' PSC, the schematic below illustrates the sharing of oil.
Under the PSC terms, the WesternZagros portion of “Profit Oil” is based on a sliding scale from 35% to 16% depending on the R-Factor. The R-Factor is established by reference to the ratio of WesternZagros’ cumulative revenues over cumulative costs. When the ratio is below one, WesternZagros is entitled to 35% of the Profit Oil. WesternZagros’ percentage is then reduced to on a linear sliding scale to a minimum of 16% at a ratio of two or greater.
