Analysis of Managing Contractual Risks in Nigeria's Upstream Petroleum Sector

The article delves into the significance of Production Sharing Contracts (PSC) as a cornerstone in Nigeria's upstream petroleum sector, particularly after the enactment of the Petroleum Industry Act (PIA) 2021. It highlights the contractual arrangements, financial risks, and obligations borne by parties involved, such as international oil companies (IOCs) and indigenous contractors.

The PSC system ensures the Nigerian National Petroleum Company Limited (NNPCL) acts on behalf of the federal government, guaranteeing profit-sharing without upfront capital outlay. The PSC structure under the PIA 2021 clearly allocates risks and costs, securing Nigeria's revenue without burdening contractors.