AN EXAMINATION OF THE LEGAL REGIME FOR PRODUCTION SHARING CONTRACTS IN THE UPSTREAM PETROLEUM INDUSTRY IN NIGERIA

📄 Project Abstract

Production Sharing Contract (PSC) is an arrangement used in the upstream petroleum sector for the exploration and exploitation of petroleum resources by several oil producing countries, particularly the developing ones such as Algeria; Angola; and Gabon.1In the case of Nigeria, the PSC arrangement has been largely adopted for the exploration and exploitation of the offshore and inland basin petroleum reserves.2 It is an arrangement in which the international oil company (IOC) usually referred to as the contractor, solely deploys its capital and expertise into petroleum exploration and production on the understanding that such produced crude oil would be shared with the state party at agreed ratio after deduction of costs and applicable taxes.A PSC is a contractual arrangement between an IOC and the host State authorizing the IOC to conduct petroleum exploration within a certain area in accordance with the terms of the contract.3 The PSC or production sharing agreement (PSA) as it is al...