Application of artificial intelligence in production sharing agreements

Artificial intelligence is transforming the mining industry and is becoming an increasingly important component at various stages of the production process.

Science-intensive technology promises comprehensive cost savings, improved safety, environmental efficiency, and reduced carbon footprint.

However, technology also carries risks such as high integration costs, data security issues, overreliance on empirical and simulated data, and ethical dilemmas.

Despite the challenges the mining sector faces, it is showing a willingness to shape the future of the mining industry, albeit at a slow pace.

In the critical minerals sector, the energy transition continues to drive demand as the industry faces challenges such as declining ore quality, increased mining project timelines, and rising costs.

Generative AI models are used primarily to support research aimed at finding new, more sustainable materials for batteries.

Advances in artificial intelligence have led investors around the world to believe that the introduction of artificial intelligence technologies will bring high returns in the future, not only in the mining industry, but also in all sectors of the economy. The question remains: will these high expectations be justified?

In the practice of investors, there is a problem with the «allocation of costs in oil and gas operations» of business entities between their production costs in economic activities and the separation of the actual costs of fulfilling obligations under production sharing agreements.

Creating an electronic sub-account «Joint Accounting Account» on an electronic platform (based on developed artificial intelligence modules) will help the investor with automated processing of tax and accounting data, formation of analytical materials based on geo-exploration work, industrial development of deposits, and drilling activities.

In addition, the launch of an electronic platform will strengthen trust between investors and the state, as it can act as a preventive measure and safeguard against the emergence of potential arbitration disputes and court settlements in terms of investors' compliance with agreed work programs and compensation for costs incurred in terms of investment activities.