Production-sharing agreements were first used in Bolivia in the early 1950s, although their first implementation was similar to that of today in Indonesia in the 1960s.  Today, they are often used in the Middle East and Central Asia. Risk-sharing contracts (RSCs), first introduced in Malaysia, depart from the production-sharing contract (PSC), which was introduced in 1976 and was recently revised last year as an oil recovery amp toP(PSC), which increased the recovery rate from 26% to 40%. As a high-yield agreement, it is being developed in Malaysia for the population and private partners, in order to benefit from both a successful and vibrant monetization of these peripheral areas. During the Asia Forum production optimization week of the Center for Energy Sustainability and Economics in Malaysia, July 27, 2011, Finance Minister YB. Sen. Dato`Ir. Donald Lim Siang Chai said that the pioneering RSC requires optimal implementation of production targets and allows the transfer of knowledge between foreign and local players in the development of Malaysia`s 106 marginal fields, which contain a total of 580 million barrels of oil equivalent (BOE) in the current high-demand and low-resource market.  At-risk service contracts. It is an agreement by which the oil company is responsible by the public body, as a contractor, for the use of all venture capital for oil exploration and development. In the event that the contractor does not discover the oil tank, the contract will be foiled without any obligation of the parties.
However, if the contractor is successful in the oil exploration of the volume of trade, he has the right to recover, in addition to a possible participation in the subsequent undertaking, the costs and remuneration related to the benefits. If not, the company will run out of bag. Such an agreement guarantees that the host government will retain sovereignty over natural resources at all times. Like a PSA, the risk services contract deals with the situation where a host government tries to use private companies to withstand the risk of exploration. In production-sharing agreements, the country`s government entrusts the production and exploration activities to an oil company. The oil group supports the mineral and financial risk of the initiative and explores, develops and produces the field as needed. During the successful year, the company can use the money from the oil produced to recover capital and operating expenses known as “cost oil.” The rest of the money is called “profit oil” and is shared between the government and the company. In most production allocation agreements, changes in international oil prices or the rate of production affect the company`s share of production.
5. The types of upstream oil contracts with national production sharing (EPI) or production distribution (PSC) contracts are a common type of contracts signed between a government and a commodity extraction company (or group of companies) on the level of resource extracted from the country (usually oil). The production allocation agreement (“PSA”) is a form of agreement under which the state retains ownership of the resources, but allows foreign companies to manage and exploit the development of the oil field, which is to negotiate an incentive system.