The Pearl project will be executed under an integrated Development and Production Sharing Agreement (DPSA). A Production Sharing Agreement (PSA) is a type of contract commonly used in upstream oil and gas ventures between a host government (which owns the reserves) and an oil/gas company (Contractor). The DPSA for the Pearl GTL project is novel in the sense that this agreement also covers the downstream section. Under the Pearl DPSA, Shell will provide all the funding and will bear the risk of appraisal, development and production activities in return for a share in the production for a fixed project duration. The specific commercial terms for the Pearl GTL project are confidential. In a typical PSA, the share of the production to which the contractor is entitled is partly linked to the recovery of past costs, and partly a profit element which is a function of the contractor's profitability ratio, measured though the cumulative returns to the contractor divided by the cumulative costs paid by the contractor. As this ratio gets larger, the share due to contractor diminishes, whereas the host government's share increases. | 
