Production Sharing Agreement (PSA)

Overview

• PSA is a core legal contract between Oilbi Ltd, the Ministry of Energy, and the Tanzania Petroleum Development Corporation (TPDC).
• This agreement secures Oilbi’s exclusive rights for exploration and development of natural gas in offshore Blocks 2R and 3R.
• The PSA forms the legal foundation for Oilbi’s LNG project, setting clear terms for revenue sharing, investment recovery, and compliance with international standards across environmental, social, and governance (ESG) practices.

Signing Status

• The PSA is currently in its final stage, pending official signature by all parties.
• Once signed, it will provide full legal certainty and protection for Oilbi‘s activities, enabling project advancement and facilitating partnerships with global energy and financial institutions.

Key Points

• Exclusive Rights: Oilbi takes exclusive exploration and development rights in Blocks 2R and 3R for both oil and natural gas.
• Royalty: Fixed at a globally competitive 7.5%
• Cost Recovery: High recovery Capex of up to 75% of total production, reducing investor risk and accelerating quick return on investment
• Local Content and ESG: Requires prioritization of local businesses, technology transfer, and strict adherence to environmental and safety standards.
• Arbitration: International dispute resolution under ICC rules is guaranteed, with freedom for foreign exchange and remittance.
• Assignability: Project Rights can be assigned to affiliates or third parties.