Most often a Production Sharing Agreement is used when there are already one or more units on some or all the acreage. An agreement between the parties to a well and a host country regarding the percentage of production each party will receive.Production sharing agreements allocate the proceeds from oil and gas developments to the state and to the private developer. Identify any special roles or obligations of each party related to the production sharing agreement. How is the share of revenue defined? An agreement between the parties to a well and a host country regarding the percentage of production each party will receive. From produced production volumes, the cost recovery comes out first, with the remained being considered "profit production". Such rules are detailed in the accounting procedure, which is an attachment to the PSC.7. PSC and PSA (for "production sharing agreement") are commonly used interchangeably in the literature. Under a PSA the relations between the state and the investor are contractual, that is formally equal.