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Another form of agreement that foreign investors, particularly in the oil and gas sectors, can conclude is a production sharing agreement (PSA). The Law on Production Sharing Agreements specifies the terms under which foreign investors may enter into PSAs. Usually, PSAs are restricted to areas where there are no proven reserves or in cases where there are proven reserves, but there is a lack of financial and technical resources on the part of the State to exploit these resources. As a rule PSAs are subject to competitive bidding. However, the Cabinet of Ministers may waive this process if there is only one foreign investor interested in a particular area. Activities under the PSA are subject to licensing by the Cabinet of Ministers. The financial statements, budgets and economic activities related to the PSAs must be audited annually.

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Last Updated ( Friday, 23 November 2007 )