A Legal Analysis of Production Sharing Contract Arrangements in the Nigerian Petroleum Industry

Abstract

Production sharing contract (PSC) is an arrangement used in the upstream sector for the exploration and development of petroleum resources. Several oil producing countries, particularly the developing ones have adopted it as a contract for the exploration and development of their oil and gas resources. Nigeria has adopted it for the exploration and development of the offshore and inland basin. This paper examined the concept and general basic features of PSC. It went further to look at the PSC arrangements in Nigeria and observed that there are various models of PSC executed in Nigeria and identified the significant differences in each one. In addition, it reviewed the Deep Offshore and Inland Basin Production Sharing Contracts Act, 1999 which gave legislative backing to the fiscal terms granted by the Government to certain PSC models. It evaluated the various models of PSC executed in Nigeria and ascertained the shortcomings in them.

Keywords: production sharing contract, different models of production sharing contract in Nigeria