Once the resource has been extracted, the upstream portion of the operation is complete. Midstream companies collect raw materials and transport the resource by pipeline, railway or tanker to refineries. Refineries are the downstream phase of the oil and gas industry. They turn crude oil into derivatives. They also sell and distribute natural gas and products from crude oil. Therefore, under this type of agreement, the company or consortium provides technical know-how and capital and assumes the risk of the project in return for exclusive rights to oil and/or gas exploration and production originating in the contract territory. The host state generally owns the facilities and facilities. Unless otherwise stipulated in the legislation or the production-sharing agreement, the company also pays the income tax to the host Member State as well as all other taxes and contributions provided by the legislation and the corresponding contract. The upstream sector of the oil and gas industry includes all the necessary steps from preliminary exploration to resource extraction. Upstream companies can participate in all stages of the oil and gas industry lifecycle or can only be involved in a part of the upstream sector. Another name for the upstream oil sector, which is in fact more representative of what is happening at this stage of the development of an oil and/or natural gas field, is the exploration and production sector (E-P).
Production-sharing agreements do not confer any ownership rights over oil production on the company or consortium that concludes the agreement. Instead, the company receives a share of the total production. The production balance sheet belongs to the host state. Risk service agreements are the least used type of contract among the three listed here. They have been used by states that have a nationalist approach, or by countries like Venezuela, Iran or Iraq, which have long had oil production. Under this type of agreement, the host Member State is merely terminating the service of an oil company or consortium in order to benefit from its financial and technical know-how. The company or consortium assumes risk and responsibility and is reimbursed by a service fee that is usually paid in cash. An example of this type of agreement is the absence of Iran`s buy-out agreements, which have proved too painful to be considered by a private investor. Upstream, this is a term for the oil and gas industry`s operating stages, which involve exploration and production. Oil and gas companies can generally be divided into three segments: upstream, current and downstream. Upstream companies are primarily interested in exploration and the early production phases of the oil and gas industry. Angola, Egypt, Kenya, Tanzania, Uganda and Mozambique are among the countries following the production sharing agreement model, while Ghana uses the project contract model for exploration and production concessions.
If the parties do not amend Schedule E to include such a licensing agreement in the days following the first issuance of such a licensing agreement to Juno, such a licensing agreement is not a fate upstream agreement and the intellectual property rights that are granted to Fate under this license agreement are automatically excluded from the definitions of Fate Know-How and Fate Patents.