Production Sharing Agreement Vs Joint Venture

2. With regard to the payment of royalties, PSCs are also considered optimal on the basis of the information they have provided, as they are free of misrepresentations and significant errors. Thus fully and in accordance with the actual royalties to be paid. On the other hand, there are JVs with differences in the balance sheet of royalties paid to the government and the adjusted figures of the auditors. The result is a decline in government revenues, a promotion of corruption and an increase in poverty. Pure Service ContractsA service contract is a contract between a contractor and a host government that generally covers a defined technical service that must be provided or concluded for a certain period of time. The investment of the service company is generally limited to the value of the equipment, tools and personnel used to perform the service. In most cases, the reimbursement of the service contractor is determined by the terms of the contract, with little consideration given to project performance or market factors. Payment for services is usually based on daily or hourly rates, a turnkey fixed rate or other specified amount. Payments can be made at specified intervals or after the service is completed. Based on our understanding and decades of experience in the oil and gas industry, our oil and gas team provides all the commercial, financial and technical services necessary to conclude this agreement. Based on the relevant data collected and analyzed in this study and the comprehensive study of contractual agreements on rent and transparency and economic accountability, this study concludes that the VVs contractual agreement has been optimal for exploitation in the Nigerian oil industry, with the optimal JWs of both the government and the FOCs having an optimal participatory interest in exploration.

, the development and production of oil and gas in the industry and the provision of funds for the oil and gas exploitation of the joint venture partners in proportion to their participation. The study also documented CVs as the most optimal for sustainable development by contributing to environmental, social and economic sustainability in Nigeria. Finally, the study found that COPS are a more transparent regime in the sector. As shown in Table 2, the highest production volumes are as follows during the analysis periods, which means maximizing revenues for both the government and FOCs, in the sense that they are production-based. So it increases the economic rent. In addition, prior to 2005, there were no charges for water depth of more than 1000 metres; Almost all Nigerian PSC fields are located beyond 1000 meters deep. It can be said that the COPS have dispossessed the government`s royalties. This finding supports the results of Umar (2005) and Muhammad (2010). In addition, under the Nigerian JVs contracts, there are royalties of 20 per cent for all onshore oils and 7 per cent for gas projects in addition to the offshore royalties presented in Table 3.

PSKs in the inner basin are subject to 10% royalties. As a result, JVs are optimal in terms of royalty revenue.