Legal Aspects of Production Sharing Contracts 

Classroom session

15-17 Apr 2024

Houston, USA

Classroom session

08-10 Jul 2024

Aberdeen, Scotland

Classroom session

09-11 Sep 2024

Abu Dhabi, UAE

15-17 Apr 2024

Houston, USA

08-10 Jul 2024

Aberdeen, Scotland

09-11 Sep 2024

Abu Dhabi, UAE

Course Summary

  • course overview

  • Course objectives

  • course audience

Course Summary

Unit One: History, Government Grants, the Rise of Production Sharing, and the Role of the State

In the vast and complex world of the petroleum industry, certain agreements and concepts have played pivotal roles in shaping its dynamics. This unit of the course delves into the historical context and the role of government grants in the petroleum sector, highlighting the significant shift towards production sharing agreements and state involvement. We'll also explore ownership issues and the intriguing concept of initiation, all while discussing host government contracts, service contracts, and concession agreements. To add to the complexity, we'll introduce the concept of constitutional amendments and central elements in Production Sharing Contracts (PSC).

Understanding the Historical Landscape

To comprehend the modern-day intricacies of the petroleum industry, it's crucial to first journey through its historical context. This section will take you through the early stages of the industry, where government grants played a fundamental role in its development. We'll uncover how government policies and grants have shaped the landscape, leading to the rise of production sharing agreements.

Production Sharing Agreements: A Paradigm Shift

The petroleum industry has witnessed a significant shift towards production sharing agreements. But what are they, and how do they impact the sector? This section provides a detailed exploration of the mechanics of production sharing agreements and how they have changed the game. We'll also look at the involvement of the state in these agreements and its implications for various stakeholders.

Ownership Issues and Initiation

Ownership of oil and gas resources is a contentious issue, often leading to complex disputes. This section delves into the intricacies of ownership issues and introduces the concept of initiation. Initiation is a fascinating approach to resource management that you won't want to miss.

The World of Contracts: Host Government, Service, and Concession

The petroleum industry operates under a web of contracts, each with its own set of rules and responsibilities. In this section, we'll unravel the mysteries of host government contracts, service contracts, and concession agreements. Understanding these contractual arrangements is crucial for anyone involved in the industry.

Constitutional Amendments and Central Elements in PSC

Constitutional amendments can have far-reaching consequences in the petroleum sector. This section explores the concept of constitutional amendments and their impact. We'll also look at the central elements within Production Sharing Contracts and why they are so vital.

Unit Two: Timing, Controlling Decision Making, Natural Gas Issues, What to Watch

As we move forward, our focus shifts to the phases of Production Sharing Contracts (PSC), with a particular emphasis on the exploration phase. We'll also delve into work commitments, extension rights, and the decision-making processes involved. Natural gas-related challenges are dissected, and we compare associated vs. non-associated gas. This unit will also discuss best practices, government assistance, and local content, offering a compelling case study on local content and procurement policies.

Phases of Production Sharing Contracts

The exploration phase of Production Sharing Contracts is a critical stage that sets the tone for the entire project. This section breaks down the exploration phase, explaining its key components and what makes it so vital.

Work Commitments and Extension Rights

Work commitments and extension rights are crucial elements that can significantly impact the success of a project. We'll take a closer look at these concepts and why they matter.

Decision-Making Processes

In the dynamic world of the petroleum industry, decision-making can be a complex process. This section unravels the decision-making processes involved in PSC and how they affect the stakeholders.

Natural Gas Challenges: Associated vs. Non-Associated Gas

Natural gas is a valuable resource, but it comes with its own set of challenges. This section explores the differences between associated and non-associated gas, shedding light on the unique issues they present.

Best Practices, Government Assistance, and Local Content

Success in the petroleum industry often hinges on best practices, government support, and local content. We'll discuss how these factors can make or break a project, and why they are worth paying attention to.

Case Study: Local Content and Procurement Policies

To provide a real-world perspective, this unit concludes with a case study on local content and procurement policies. You'll gain insights into how these policies are implemented and their impact on the industry.

Unit Three: Fiscal Terms, Evolution Over Time, Taxation, Cost Recovery, and Audit Disputes

In this unit, we shift our focus to fiscal terms within PSC, including signature bonuses, royalties, and taxes. We'll discuss profit sharing, cost recovery, and the areas of dispute related to accounting procedures. Additionally, we'll highlight the importance of good oilfield practices and state rights to data. We'll also emphasise the role of lessons learned from global experiences in PSC.

Understanding Fiscal Terms

Fiscal terms are a crucial aspect of Production Sharing Contracts, influencing the revenue and benefits for all parties involved. This section breaks down fiscal terms, explaining key concepts like signature bonuses, royalties, and taxes.

Profit Sharing and Cost Recovery

Profit sharing and cost recovery mechanisms are at the core of PSC. We'll delve into how these aspects work and why they can sometimes lead to disputes.

The Importance of Accounting Procedures

Accounting procedures are the backbone of financial transparency in the petroleum industry. This section highlights the areas where disputes can arise due to differences in accounting procedures.

Good Oilfield Practices and State Rights to Data

Maintaining high standards in oilfield practices is vital for safety and efficiency. We'll explore what constitutes good oilfield practices and discuss state rights to data, a critical aspect of transparency and oversight.

Lessons Learned from Global Experiences in PSC

The petroleum industry is a global one, and there are valuable lessons to be learned from experiences around the world. We'll examine how global experiences have shaped the evolution of Production Sharing Contracts.

Unit Four: Recent Risk Development, Decommissioning Challenges, Dispute Resolution, and Stabilisation

This unit shifts the spotlight onto risk development, decommissioning challenges, and the art of dispute resolution. We'll address the transfer of facilities, environmental protection, and various approaches to stabilisation. Additionally, we'll explore the options available for resolving disputes, including international centres and treaties, and discuss the limits of liability and the law in the context of PSC.

Unpacking Risk Development

Risk development is a topic that's always on the radar in the petroleum industry. We'll delve into the latest trends in risk development and how they can impact projects.

Challenges in Decommissioning

Decommissioning is a complex and often overlooked aspect of the industry. We'll discuss the challenges involved in decommissioning and how they are being addressed.

The Art of Dispute Resolution

Disputes are inevitable in the petroleum sector, and knowing how to resolve them is crucial. We'll explore various options for dispute resolution, including international centres and treaties.

Limits of Liability and the Law

Understanding the legal aspects of Production Sharing Contracts is essential. This section examines the limits of liability and how the law comes into play in the context of PSC.

Unit Five: A Closer Look at Myanmar and Senegal; Case Studies from Around the Globe

Our final unit takes a deep dive into specific case studies from two diverse locations: Myanmar and Senegal. We'll explore the historical context and PSC periods in these countries, discussing guarantee obligations, state participation rights, local content, and the intriguing concept of DMO (Daily Maximum Output) risk. The unit will also offer updates on case law related to force majeure, material adverse effects, and more.

Case Study: Myanmar

Myanmar presents a unique case study in the world of petroleum. We'll explore the country's history, its experience with Production Sharing Contracts, and the key takeaways from this case.

Case Study: Senegal

Senegal, on the other hand, offers a different perspective. We'll delve into Senegal's petroleum history, its approach to PSC, and the lessons that can be learned from its experiences.

Guarantee Obligations and State Participation

Guarantee obligations and state participation rights play a crucial role in shaping the dynamics of PSC. This section explores how these elements are implemented in practice.

DMO (Daily Maximum Output) Risk and Applicable Law

DMO risk is an interesting concept with significant implications. We'll discuss what it means and how applicable laws come into play.

Case Law Updates: Force Majeure and Material Adverse Effects

Finally, this section provides updates on case law related to force majeure and material adverse effects, highlighting how legal interpretations can impact PSC outcomes.


This comprehensive overview has taken you on a journey through the intricate world of Production Sharing Contracts in the petroleum industry. From historical context and government grants to fiscal terms, risk management, and case studies from around the globe, we've covered it all. This 3-day course serves as a valuable resource for anyone looking to gain a deeper understanding of this complex industry.

Questions about the course?

Why don't you schedule a free Microsoft Teams meeting with one of our advisors at your convenient time?

Our Trainer 

Meet your trainer

Tom has more than 25 years of experience in the oil and gas industry, both as a barrister and as a solicitor.

Tom's focus is on international energy projects, with a particular emphasis on gas and LNG. In 2002 and 2003 Tom and his family lived in Doha, Qatar, where Tom was Senior Counsel (Projects) with Qatar Petroleum, the national oil and gas company for the State of Qatar. While in Qatar Tom acted for Qatar Petroleum, as well as both Qatargas and RasGas.

Course Fees

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