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Journal of Finance and Accounting. 2014, 2(2), 34-40
DOI: 10.12691/jfa-2-2-2
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A Comparative Analysis of Production Sharing Contracts of Selected Developing Countries: Nigeria, Indonesia, Malaysia and Equatorial Guinea


1Aberdeen Business School, Robert Gordon University Aberdeen, United Kingdom

Pub. Date: May 28, 2014

Cite this paper:
SANI SAIDU. A Comparative Analysis of Production Sharing Contracts of Selected Developing Countries: Nigeria, Indonesia, Malaysia and Equatorial Guinea. Journal of Finance and Accounting. 2014; 2(2):34-40. doi: 10.12691/jfa-2-2-2


Maximization of returns and benefits are the major determinants state considers for adopting particular petroleum fiscal regime in the course of exploiting its petroleum resources. Two major fiscal regimes are adopted for exploiting petroleum resources: Joint venture agreement (JVA) and production sharing contract (PSC). However, considering the inherent difficulties associated with Joint venture agreements, developing countries gave emphasis to production sharing contract. This study aims to compare expected returns from exploiting petroleum resources of selected countries (Nigeria, Indonesia, Malaysia and Equatorial Guinea) that have adopted the Production Sharing Contracts. A literature based methodology was adopted, and indeed, data were gathered from the PSC treaties and related documents. The findings suggest that Nigerian PSC provides less return compared to its contemporaries. Indeed, the results showed that Malaysia received the highest returns, followed by Indonesia and Equatorial Guinea. On the other hand, the findings justified the underlying hypothesis of socio-economic factors help shape the terms and conditions of oil and gas contracts in developing countries particularly production sharing contract.

comparative analysis production sharing contracts joint venture agreement

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