What is the benefit of letting an energy company develop an oil field, rather than outsourcing the development (and possibly the operation) to an oil service company?

Seems to me that you wouldn't have to do any revenue sharing if you used the second approach, although you would have to provide the investment capital yourself.

Risk sharing and capital. An oil service company is merely an operator and will not take on development risk. That is the whole point of revenue sharing - sharing upside and downside. Revenues less than projected? Tough.

The problem in the equation is the State companies, or rather their governments tend to look at this simplistically as you just did. They forget when revenues are up that the partner was sharing downside risk as it injected speculative equity capital (as well as put own resources to work there, rather than in owned fields, etc), and not merely working for pay.

The problem is that the downside seems limited, while the upside seems to be rather open-ended given how the price of oil has behaved lately.

This would not be a problem if the revenue-sharing was capped at a certain price. So that the down- and upsides match each other, including suitable risk premiums and the like on the upside.

That's not a problem, that is a feature of current prices. Rewind 2 years or even a year that was not the case. Given the current downtrends, the shrieking and howling re 100 USD oil seems overdone.

Capping off revenue sharing at a certain price caps off the upside.

Why do I want to put my precious equity at risk when you deprive me of the benefits. Sinking a hole in the ground is expensive, especially given dry rates. Further, even when upgrading current producing fields, risk and massive expense is involved.

In short, you want my equity, you give me a slice or go fuck yourself and generate your own expertise and equity, worked so fucking well for the State firms so far.

(Of course there are other considerations, but your analysis is typical market illiterate.)