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Typical Methods & Principle of OPEX & CAPEX Allocation for Common Facility

This article only cover OPEX and CAPEX for hydrocarbon platform to terminal or point of sale / transfer of custody and risk.

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OPEX ALLOCATION

  • The cost structure for all pipeline OPEX shall be distributed & allocated all stakeholder on no gain/loss principle.
  • Basis for OPEX allocation will be based on pipeline (PL) length & gross production.
  • OPEX allocation shall include riser maintenance cost for which these platform pass thru to terminal.
  • Gross production shall be based on actual volume of natural gas, condensate & crude oil based on allocation (Metering, Testing, allocation & Balancing)

Basis & Assumptions:

  1. Upfront CAPEX Sharing Basis:
    • Long Term Production Forecast (LTPF) based on latest approved WP&B (Work Program & Budget) in the year the construction of the said facilities commenced.
    • The LTPF is based on Production Sharing Contract or field life whichever is earlier.
  2. CAPEX Sharing treatment for New User:
    • Upfront CAPEX sharing will be re-calculated based on LTPF from the latest approved WP&B of the existing PSCs plus the new PSC. The LTPF figures for the existing PSCs shall be kept hold (as it hold).
    • The LTPF is based on PSC or Field Life whichever earlier.
  3. Accounting treatment of item (2)
    • Adjusted amount of CAPEX of the existing PSCs will be credited against their respective expenditure.
    • Adjusted amount for adjustment of CAPEX of the new PSC will be debited against its respective expenditure.
  4. Threshold amount for adjustment of upfront CAPEX usually are limited based on the common facility usage agreement. 
  5. Outstanding CAPEX Fee (Historical)
    • New operator shall continue pursuing the historical CAPEX claim from the users.

Example:

1.PNG

C : Adjustment of Initial Funding = New CAPEX Payable – CAPEX Payable Previously

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