| Summary/Abstract |
Developing countries endowed with petroleum resources face various challenges in balancing their economic development needs and their contribution to combating climate change. They aim at increasing their reliance on renewable energy; however, they are faced with regulatory, financial, technical, and knowledge-related barriers. Many oil and gas companies started to transition from their core business in oil and gas to the wider energy field. In this paper, we show how the most common contractual arrangement between developing countries and oil and gas companies - the Production Sharing Contract (PSC) - can be modified to include renewable energy elements. We introduce a Renewable Contribution parameter that defines the share of the company profit petroleum that should be re-invested in renewable energy in the host country and we develop an optimization model that defines the state objective function and constraints. We apply the modified PSC to the case of Lebanon after populating various oil and gas and renewable energy scenarios. We show that a limited Renewable Contribution of 10% can provide a large share of the investment needs of the renewable energy sector and can contribute to emission reduction, economic development and job creation while providing companies with attractive economic incentives.
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