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Abstract
The petroleum sector constitutes the fundamental pillar of Nigeria's economic architecture, providing substantial contributions to governmental revenue streams and foreign currency reserves. Amongst the diverse contractual frameworks utilised in hydrocarbon resource administration, Production Sharing Contracts have established themselves as the predominant mechanism, particularly within offshore exploration ventures. This research undertakes a comprehensive evaluation of the juridical, institutional, and operational facets of Production Sharing Contracts within Nigeria, scrutinising their efficacy in achieving equilibrium between sovereign oversight and commercial viability for investors. The investigation examines pivotal legislative frameworks, including the Deep Offshore and Inland Basin Production Sharing Contracts Act and the Petroleum Industry Act 2021, while it is simultaneously analysing the functions of regulatory bodies such as NNPC Limited and the Nigerian Upstream Petroleum Regulatory Commission. Additionally, this study investigates fundamental contractual provisions within Production Sharing Contracts encompassing cost recovery mechanisms, profit distribution arrangements, and fiscal stabilisation clauses and assesses how these instruments influence the economic and operational environment. A comparative examination of international Production Sharing Contracts frameworks in Malaysia, Indonesia, and Iraq is undertaken to discern exemplary practices and contextual insights. This study illuminates structural deficiencies, transparency challenges, and community impact considerations, employing the OPL 245/Malabu controversy as an illustrative case study. The analysis culminates with strategic policy recommendations designed to transform Nigeria's Production Sharing Contracts framework, ensuring sustainable development objectives, equitable resource stewardship, and enduring investor confidence.
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