A Production Sharing Agreement (PSA) is an agreement between a government and a resource extraction company. A PSA allows by the government to the company the right to extract and develop a natural resource under which the company bears the financial risk of exploring and extracting the resource production facilities in return for the right to export or sell a quantity of gas or oil.
Reference Definition by Gas Strategies: A Production Sharing Agreement (PSA) an agreement between an international producing company and a host government or state oil company under which the international company acts as risk-taking contractor investing in exploration and/or production facilities in return for the right to export or sell a quantity of gas or oil that may be produced from the Concession or Block. Sometimes known as a Production Sharing Contract. The terms are interchangeable and the use of one or the other depends on the country.
Related Definitions in the Project: The Project Contract; Energy Definitions
