Contractual Systems in the Oil and Gas Sector: Current Status and Development

Fatima Dirani and Tatiana Ponomarenko
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Fatima Dirani: Faculty of Economics, Saint-Petersburg Mining University, 21st Line V. O., 2, 199106 Saint Petersburg, Russia
Tatiana Ponomarenko: Faculty of Economics, Saint-Petersburg Mining University, 21st Line V. O., 2, 199106 Saint Petersburg, Russia

Energies, 2021, vol. 14, issue 17, 1-14

Abstract: Production activities in the oil and gas industry are capital-intensive and associated with high technology, with these assets not always being available to oil-producing countries or national companies. Any form of interaction between the parties involved in natural resource extraction requires clear regulation regarding contractual relationships. This study attempts to analyze Indonesia’s production sharing contract system in order to assess its applicability to other conditions. The article covers the key aspects of contract theory, provides a classification of contractual systems in the oil and gas sector, and discusses the most common types of contractual agreements. It also considers the key principles of production sharing contracts (PSCs), analyzes the development of PSC practices in Indonesia over the past sixty years, and highlights PSC advantages and disadvantages.

Keywords: production sharing contract (PSC); production sharing agreement (PSA); concession; Indonesia; oil and gas sector; contracts (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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