Joint venture agreement and Production sharing contract are the two most common fiscal systems for petroleum operations in Nigeria. In this study, models were developed and compared for Joint venture agreement (JVA) and Production sharing contract (PSC) for the Nigeria fiscal systems. The results showed that the government has more take and a higher NPV under the JVA than the PSC. Sensitivities were carried out for the NPV and the results showed that NPV was most sensitive to oil price.
An approach was also developed, based on the percentage loss in NPV of the contractor and community take, that serves as a guide for the contracting firms and JVA partners to determine how much should be given to the host community in such a manner that will not significantly affect their NPV and yet achieve their social responsibility.