Opinions

Resource funds have been funded from a variety of sources. In some cases, large trade surpluses have been added to the foreign-exchange reserves of some countries, so as to substantially exceed the normal needs for foreign-exchange stabilisation. In other...

Discussions have been ongoing about the nature of the Production Sharing Agreement (PSA) Guyana has entered with ExxonMobil for the Stabroek block since oil was discovered back in 2015 and production got underway in December 2019. But what exactly are PSAs?...

The mere mention of a natural resource discovery, especially of oil and increasingly of gas, ignites personal and national dreams of riches and hopes of prosperous times, fuelled more than ever by recent dramatic changes in oil prices. Many emerging...

Fiscal design elements are important, but so are the means by which governments choose to allocate acreage or projects.  As can be seen today, there is significant competition for a limited amount of exploration capital. At the same time,...

Most governments go to a lot of effort to distance themselves as much as possible from exploration risk. This can be done through management of block sizes, relinquishment, and ringfencing, discussed in turn below. Block size and configurations Block size...

The investor’s response to any given tax instrument or regime depends on the interrelations that link each of their profit decisions. For example, it may be supposed that a high royalty rate would cause early abandonment of a field...

Keep in mind, however, that most fiscal systems in the world are moderately regressive. The revenue the governments receive will go up, but Government Take will go down on average. Finally, it is important to remember that the differences...

In the universe of oil contracts, two main families of fiscal system exist. The first family includes ‘concessionary’ systems, so-called because the government grants the company the right to take control of the entire process – from exploration to...

Oil is the world’s number one strategic commodity. It is of vital interest to developed and emerging markets that rely on imported oil and gas. It is also vitally important to exporting nations, many of them among the poorest...

A risk associated with complex contracts is that the true market value of the contract may be better understood by the oil companies than by the government. For instance, if oil prices are highly volatile, and there is no...