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Oil, Gas & Mining vocabulary · Industry, Reserves & Contracts

production sharing agreement (PSA)

Meaning in oil, gas & mining, with examples

nounAdvanced term

In oil, gas & mining, production sharing agreement (PSA) means: A contract in which the state keeps ownership of the oil or gas, the company pays for exploration and development, and production is shared between them after the company's costs are recovered.

In Turkish: üretim paylaşım anlaşması, üretim paylaşım sözleşmesi

How it is used

Also called a production sharing contract (PSC). Key terms are cost oil (the share that repays the company's costs) and profit oil (the rest, split between the state and the company). It is an alternative to a licence and royalty system.

Example sentences

  1. Under the production sharing agreement, the state takes 60 percent of profit oil.

  2. The company signed a production sharing agreement for an offshore block.

Common collocations

  • sign a PSA
  • cost oil
  • profit oil
  • production sharing contract (PSC)
  • royaltyA payment that a producing company makes to the owner of the resource, usually the state, calculated as a share of the value or volume of the oil, gas or minerals produced.
  • upstreamDescribing the first stage of the oil and gas business: finding hydrocarbons, drilling wells and bringing oil and gas to the surface.
  • explorationThe work of searching for new oil, gas or mineral deposits, using geological mapping, geophysical surveys, sampling and test drilling.
  • reservesThe amount of oil, gas or ore that is known to exist and can be produced at a profit with current technology and prices, estimated under set rules.

More terms: Industry, Reserves & Contracts

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