Mineral Production Sharing Agreement

1 See ex.B. Hyde, Economic Development Agreement, 105 Rec. of Course 272, 283 (I, 1962) (” . . . practical difficulties in assembling primary sources.┬áBrudno, Review of Considerations Arising in Foreign Oil Operations, Ninth Ann. Institute on Oil and Gas Law and Taxation 397 (1958) (1958) (“Information on the details of existing concessions is scarce, and that actual activity tax results under these concessions are elusive.” Guldberg, International Concessions, A Problem of International Economic Law, 15 Nordisk Tidskreft for International Ret 47, 50 (1944) (. . [M]ost of the concession agreements that are reproduced here are previous concessions. This is because concession contracts are almost never published.

They are jealously hidden. . . . 2 In Indonesia, “employment contracts” for the development of hard ores are very different from “production-sharing contracts” for oil development. Compare the employment contract between the Republic.B of Indonesia and Fr. T. Kennecott Indonesia (November 1, 1969) (for copper development) and the production-sharing agreement between P.N. Pertamina and Phillips Petroleum Company (1968). Unless otherwise stated, some contracts are in the authors` personal files. 67 For a strong argument for the broad use of service and management contracts, see T. H.

Mohan, The Impact of U.S. Direct Investment on Latin-American Relations (prepared for the Commission for U.S.-Latin American Relations, Washington, June 1974). An interesting study on mineral investment in Australia found a strong link between the benefits to Australia and the trading variables discussed in the first chapter of our next book. However, the property did not appear to have any relation to the determinants of bargaining power. It appears that Australia has not given much importance to participation, but has focused on economic income. See R. McKern, Multinational Enterprise and Natural Resources: A Study of Foreign Direct Investment in the Australian Minerals Industry, feb. 1972 (Ph.D.

thesis, Harvard Business School). Other types of contracts are the co-production agreement, under which the government provides inputs other than mineral resources, and the joint venture agreement under which the government and the contractor organize a joint venture, with both parties having shares in the unit. 4 In the early 1960s, a number of “employment contracts” were negotiated in Indonesia for oil exploration and development. These were essentially incentive agreements. See z.B. Employment contract between P.N. Pertambangan Minjak Nasional and P.T. Stanvac Indonesia (1963). Reproduced in 3 ILM 243 (1964). The most recent mining employment contracts provide for the introduction of a normal corporate tax.

See employment contract between Indonesia and P.T. Kennecott Indonesia, note 2 above. 57 For a detailed review of the agreements negotiated during this period, see Gibson, Production-Sharing, 2 Bull, of Indonesian Economic Studies, Feb. 1966, 52 and S. (Part I) and June 1966, 75 and following (Part II). 46 It was proposed that, despite the management control provisions contained in its oil agreements on oil activities related to oil distribution, pertamina, the much-loved state oil company Pertamina has virtually no real control over the management of foreign operations. Robert Fabrtkant, Oil, Discovery and Technical Change in Southeast Asia – Legal Aspects of Production Sharing Contracts in The Indonesian Petroleum Industry at 21 ff. (Singapore: Institute of Southeast Asian Studies, 1973. Field Report Ser.

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