Notion and Nature of Production Sharing Agreements in International Investment Law

The problem of subsurface use and its significance for the national economy of the Russian Federation is one of the most discussed topics. In the oil and gas industry, along with the investment agreement, there is another instrument – the production sharing agreement. The production-sharing agreement has proven its effectiveness in attracting investment in 60 world countries and has become a fundamental link in the international oil and gas industry in its relatively short existence. Despite the importance of such an institution of Russian legislation as a production sharing agreement in attracting foreign investment, there is still no consensus among legal experts on the legal nature of this institution. This issue is still debatable. The issue of the legal nature of the production sharing agreement is extremely important, since it determines which legal norms can be applied. The purpose of this work is to study the production sharing agreement and determine its legal nature. The goal was to set and solve the following tasks: 1) to study historical development of production sharing agreements in the Russian Federation and abroad; 2) to study doctrinal sources and modern Russian legislation; 3) to analyze the practical experience of concluding production sharing agreements; 4) draw a conclusion about legal nature of production sharing agreements and drawbacks of modern Russian legislation regulating relations in the field of production sharing agreements. Based on the results of the study, the following conclusions were made: 1) there are several types of production sharing agreements currently in world practice; 2) the production sharing agreement has civil nature and contains administrative and legal elements; 3) the current legislation contains several drawbacks. The main drawback is the complex mechanism for concluding production sharing agreements, which complicates the application of such institution; 4) in practice of concluding such agreements, the main problem is the lack of balance of interests of the parties.