Sample Essay on Public Private Partnership in Oil and Gas
Public private partnership in oil and gas can greatly enhance the efforts of governments aimed at achieving sufficiency in the supply of energy. Oil and gas are used in most countries as the major fuels. In addition, energy is very important in any country both in the private and public sectors.
Public private partnership refers to government service and private company venture in which a government authority or agency and private sector firms participate in its funding and operations. These schemes are in some cases called P3, PPP, or simply P3.
They entail a contract involving the private party or parties and the public sector with the private party offering a project or service while assuming substantial technical, financial, and involved operation risks.
Public private partnership in oil and gas takes different forms, sizes, shapes, and structures. The partnership is used in the generation of oil and gas as well as transmission. Different methodologies are used based on the government involved, the place and specifications of the involved operation or project. Each partnership is tailored to suit the specific circumstances and needs of a given project or operation and the time when the public private partnership is created.
Public private partnerships in oil and gas are built with the consideration of long term and contractual partnerships among the private and public sector agencies. These partnerships are aimed at achieving the necessary financing, implementation, designing, and operation of the infrastructural facilities. They are also aimed at achieving efficiency in service delivery.
These joint ventures between the private sector and the public sector are established around the project capacity and expertise of the partners in the project. Usually, the private sector companies and government agencies provide expertise on the basis of their contractual agreement. The contractual agreement that binds the two sectors ensures appropriate allocation of the resources as well as sharing of returns and risks.
In some cases, the government acts as the coordinator of the venture. On the other hand, the public sector company acts as the builder, financier, and operator ensuring proper service delivery or operation of the facilities. Through public private partnership in oil and gas, a country is able to combine expertise, skills as well as experience of the private and public sectors. This enhances the delivery of quality standard services to the public.
The government or public sector provides assurance by ensuring that there is a stable government, clear fiscal regimes, and legal or regulatory systems.
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