A type of agreement which in many cases has replaced the concession (q.v.) as the form of petroleum development agreement in the Middle East and with OPEC countries elsewhere. Under an agency contract, title to oil installations and oil produced arc held by the host government, but !he government bears none of the costs of initial exploration. Also, the foreign company does not have a long-term, exclusive right to exploit the minerals as is the case under a concession agreement.
