Production penalty

{
  "id": "MLC-T-OAG-002956",
  "term": "Production penalty",
  "field": "Oil and gas",
  "definition": "A fine that a contractor pays to the host government when it fails to reach the production rates set in the contract over a defined period, a term that belongs mainly to production sharing contracts. The amount and the measurement period are fixed in the agreement. Unlike royalty or profit oil, which divide revenue, a production penalty charges for a shortfall against the agreed rate.",
  "subject": "Oil and Gas Business",
  "url": "https://mlchart.com/terminology/oil-and-gas/production-penalty/"
}