Fiscal Systems for Hydrocarbons: Design IssuesAlthough host governments and investors may share one common objective - the desire for projects to generate high levels off revenue - their other goals are not entirely aligned. Host governments aim to maximize rent for their country over time, while achieving other development and socioeconomic objectives. Investors aim to ensure that the return on investment is consistent with the risk associated with the project, and with their corporations' strategic objectives. To reconcile these often conflicting objectives, more and more countries rely on transparent institutional arrangements and flexible, nuetral fiscal regimes. This paper examines the key elements of the legal and fiscal frameworks utilized in the petroleum sector and aims to outline desirable features that should be considered in the design of fiscal policy with the objective of optimizing the host government's benefits, taking into account the effect this would have on the private sector's investment. |
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Contents
Legal Arrangements in the Petroleum Industry | 7 |
Royalties | 8 |
Designing Efficient Fiscal Systems | 13 |
Copyright | |
20 other sections not shown
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Common terms and phrases
addition allow and/or apply asset calculated capital carry forward Cash Flow NPV changes companies consideration contract Contractor's Cash Flow corporate Cost Recovery Limit countries deductible defined depends determine Different Cost Recovery Different Price Levels discount DYPTO economic effect efficient environmental example expenses exploration Field fiscal regime fiscal systems flexible given government's higher host government hydrocarbon impact important incentives income tax increase industry interest Investment Decisions Investor's NPV investors IRR at Different Johnston less Levels Fiscal Model measures neutral normally objectives obligations oil and gas operating P/O Split paid parameters particular percent Percentage Government Take Percentage IRR period petroleum Price Levels Fiscal Project IRR R-Factor reasonable Recovery Limit Fiscal rent resource result risk royalties Saving sector sliding scale specific Split stability Table Take and Project Tax NOC thresholds triggers typically
Bibliographic information
| Title | Fiscal Systems for Hydrocarbons: Design Issues Issue 123 of Document de travail de la Banque mondiale, ISSN 1726-5878 Issue 123 of World Bank working paper, ISSN 1726-5878 Volume 123 of World Bank working paper: International Bank for Reconstruction and Development |
| Author | Silvana Tordo |
| Contributor | World Bank |
| Edition | illustrated |
| Publisher | World Bank, 2007 |
| ISBN | 0821372661, 9780821372661 |
| Length | 73 pages |
| Subjects | › › Business & Economics / Public Finance Science / Energy Technology & Engineering / Power Resources / General |
| Export Citation | BiBTeX EndNote RefMan |