Production Sharing Contracts in Oil and Gas Industry: A literature review
Krisdianto Wahyu, Baihaqi Imam, Gunarta I, Wibawa I

Interdisciplinary School Of Management And Technology, Sepuluh Nopember Institute of Technology, Surabaya, Indonesia

Abstract

Exploration and exploitation of oil and gas resources requires high investments and involves high uncertainties. Many countries use production sharing contracts (PSC) mechanism to explore their potential resources into commercial values. There are various types of production sharing contracts that are operated in various countries. Using literature review, this paper identifies various type of the production sharing contracts in the world and investigates the advantages, disadvantages including the risks associated with each type of PSCs. The review results provide source of information about each type of PSCs that benefits governments, investors, and stakeholders.

Keywords: Production Sharing Contract Agreement, Cost Recovery, Gross Split, Oil and Gas, Investment.

Topic: Mineral and Energy Regulation and Economics