Haja, Shaik Mohamed Jamil (2025) Enhancement of Production Sharing Contracts and Entitlement Strategies in Malaysian Upstream Oil and Gas Companies through Integrated Supply Chain Management. Doctoral thesis, Asia e Univeristy, Malaysia.
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Abstract
The oil and gas industry is a cornerstone of Malaysia’s economy, contributing approximately 20% to the national GDP. With the dwindling reserves and rising costs, the Madani Vision and the 12th Malaysia Plan aims to ensure continuous competitiveness and sustainability of the sector. The Production Sharing Contract (PSC) is the key governing agreement between PETRONAS, as the custodian petroleum resources in Malaysia, and oil companies. PSCs draw conceptual roots from sharecropping theory, principal-agent theory, and economic rent theory. Under the PSC, oil companies receive reimbursement for their incurred expenditures (cost oil) and a portion of the remaining profits (profit oil); collectively, these allocations are referred to as the 'entitlement'. Effective management of PSC entitlement is critical for oil companies to maximise value, attract investment and ensure the sector’s long-term sustainability and competitiveness. However, in addition to the persistent challenges such as market volatility and rising production costs, the supply chain disruptions and fragmented processes adds to the challenges that hinder oil companies from fully realizing their entitlement value potential. This breakthrough exploratory study examines how integrating Supply Chain Management (SCM) strategies with PSC entitlement management can enhance operational efficiency, profitability, and strategic outcomes, focusing on upstream oil and gas companies in Malaysia, particularly those operating under PETRONAS PSC. Employing a qualitative exploratory approach within an interpretivist research paradigm, the study uses in-depth interviews with eight senior industry professionals based in Kuala Lumpur, Malaysia. This methodology aligns with the research objectives, allowing a deep exploration of subjective experiences, perceptions, and context-specific insights related to PSC entitlement management and SCM integration. Through rigorous thematic analysis, the study identifies significant opportunities arising from aligning SCM processes more closely with entitlement frameworks, notably improved coordination, reduction of operational silos, and enhanced accuracy in entitlement calculations. This study introduces the ISAC-E model, a practical, strategic framework designed to bridge existing operational and planning gaps and facilitate stakeholder collaboration, within PSC practices. The findings demonstrate that effective SCM integration not only optimizes cost efficiency and operational agility but also substantially improves regulatory compliance, and profitability essential for long-term resilience and sustained growth in the evolving global energy landscape. Ultimately, this research offers oil and gas industry stakeholders an actionable, integrated approach for navigating complex regulatory environments, and market uncertainties, ensuring Malaysia’s upstream sector remains robust, competitive, and future-ready.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Uncontrolled Keywords: | Upstream oil and gas, production sharing contract, fiscal system, supply chain management, entitlement, business integration |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor |
| Divisions: | School of Management |
| Depositing User: | Muhamad Aizat Nazmi Mohd Nor Hamin |
| Date Deposited: | 09 Apr 2026 09:10 |
| Last Modified: | 09 Apr 2026 09:10 |
| URI: | http://ur.aeu.edu.my/id/eprint/1467 |
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