Abstract
Abstract The method for sharing the profit petroleum between the host State and the contractor is one of the major topics in Production Sharing Contracts (PSCs). Profit petroleum generally can be split between a contractor and the host State based on fixed shares or the sliding scale method. This study has the principal aim of critically analysing and arguing the provisions of the Kurdistan Region utilized PSCs regarding profit petroleum-sharing arrangement in order to ascertain its legal complications. This study also aims to seek some alternatives that can be useful and adopted by the Kurdistan Regional Government (KRG) to make more profit and reduce the burden on the government. The Study has clarified that the KRG’s Model PSC and most of its PSCs have adopted the R-factor formula for sharing of profit petroleum that derives from the Kurdistan Region Oil and Gas Law No (22) of 2007. The adopted R-factor is not an appropriate method and its calculation and the contractor percentage share of profit petroleum varies in the signed PSCs. On the other hand, a number of the KRG’s PSCs, contrary to the stipulated R-factor formula in the Kurdistan Region Oil and Gas Law 2007, have adopted different formulas. Finally, the study propounds numerous recommendations for the Kurdistan Region to minimize legal contentions relating to the profit petroleum-sharing arrangement of the Kurdistan Region.
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