Beruflich Dokumente
Kultur Dokumente
Companies objective
Maximise stockholders interest (private or public)
September 2002
One has to find a correct balance between the state interest and the oil companies.
September 2002
Crucial to relate the fiscal packages on the geological basis and where on the geological learning curve that province is.
September 2002 Petrad 8 weeks course 4
Years
September 2002 Petrad 8 weeks course 5
September 2002
The fiscal policy can create disincentives to explore or to exploite the petroleum resources due to either the tax level or the tax system
September 2002
September 2002
Crucial to design the tax system so that the it do not create distortions - investor after-tax decisions should not differ from the pre-tax decisions.
September 2002 Petrad 8 weeks course 9
We define the fiscal package to be neutral if the after-tax decisions in relation to exploration, development, production and abondonment are identical to the pre-tax decisions.
September 2002
10
If the effect of the taxation are such that the companys share of the incomes is higher than the companys share of the costs
The relative relation between income and outcome in the after-tax cash-flow will be higher from the pre-tax cashflow And we might risk that the explorer overinvests and drill prospects with negativ EMV before tax
September 2002 Petrad 8 weeks course 11
Introduction of neutral taxes = = 20% After tax calculations Companys share of the additional NPV = 0 US$ The companys total NPV equal to 25mill US$
Company share of marginal incomes Company share of marginal costs Tax share of marginal income t(i) = 1- Tax share of marginal costs t(c) = 1-
Introduction of taxes t(i) = 80% and t(c) = 25% Companys share of the additional NPV = -27,5 US$ The companys total NPV become negative, equal to 2,7mill US$
September 2002 Petrad 8 weeks course 12
A=Exporation costs (disc)=50 mill US$ P= prob of discovery=20% NPV of field dev=500 mill US$ Company share of marginal incomes Company share of marginal costs Tax share of marginal income t(i) = 1- Tax share of marginal costs t(c) = 1-
Introduce Government (G) as participating in the license. The investor covers all the exploration costs the state participation is carried Assuming the Gov participation share = 60% EMV= (- A) * + (P * NPV) * (1 G) EMV= (-50)*0,2 + (0,2*500)*0,2 *0,4 EMV = -2 mill US$
September 2002 Petrad 8 weeks course 13
14
Production taxes
Gross tax tax share of income and no tax share of costs
Might cause investment distortions Give early revenues to the Government Give relatively stable incomes to the Government
September 2002
15
Profit oil
The remaining gross oil production after cost recovery every year are split between the Government and the contractor
Have the same effects as income taxes
September 2002
17