Modeling the impact of taxes on petroleum exploration and development

Modeling the impact of taxes on petroleum exploration and development / prepared by James L. Smith.

We present a simple model of petroleum exploration and development that can be applied to study the performance of alternative tax systems and identify potential distortions. Although the model is a highly simplified, it incorporates many factors and some of the key tradeoffs that would influence an...

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Bibliographic Details
Main Author: Smith, James L. (James Lee), 1950- (Author)
Format: eBook
Language:English
Published: [Washington, D.C.] : International Monetary Fund, ©2012.
Series:IMF working paper ; WP/12/278.
Subjects:
Petroleum industry and trade.
Petroleum > Taxation.
Petroleum industry and trade > Mathematical models.
Petroleum industry and trade
Petroleum industry and trade > Mathematical models
Petroleum > Taxation
Online Access:Click for online access
Table of Contents:
  • Cover; Contents; I. Introduction; A. Resource Development; B. Resource Exploration; II. Related Research; III. The Modeling Approach; A. Primary Production; B. Enhanced Production; C. Optimal Field Development; D. Solution Method; E. Modeling Price Volatility and Financial Risk; F. Exploration; G. Integration of Exploration and Development; H. Fiscal Regimes Considered; Tables; 1. Guide to Fiscal Regimes and Background Parameters Used in the Analysis; 2. Background Parameters; IV. Overview of Results; Figures; 1. Impact of Enhanced Oil Recovery Effectiveness on Optimal Development.
  • 3. Impact of Enhanced Oil Recovery on Resource Development and Recovery2. Impact of Enhanced Oil Recovery on Resource Recovery and Value; 3. Resource Recovery, by Fiscal Regime and Phase; A. Intensity of Development; 4. Total Net Present Value, by Fiscal Regime; 5. Optimal Development Programs, Price Impact; 4. Impact of Oil Price on Resource Development and Recovery; 6. Fiscal Impacts on Timing of Enhanced Oil Recovery and Abandonment; B. Diligence; 7. Incentive to Delay Development: High Cost Fields; C. Fiscal Progressivity; 8. Royalties Create Timing Conflicts in High Cost Fields.
  • 9. Government Take, by Fiscal Regime10. Effective Marginal Tax Rates; D. Price Volatility and Financial Risk; 11. Risk Sharing (Coefficient of Variation in Net Present Value); 12. Profitability Index versus Risk; E. Impact of Fiscal Design on the Optionality of Enhanced Oil Recovery; 13. Net Present Value versus Risk; 14. The Option to Implement Enhanced Oil Recovery; 15. Value of Option to Cancel Enhanced Oil Recovery; F. Exploration Incentives and Performance; 16. Impact of Price Simulations on International Oil Company Net Present Value; 17. Maximum Exploratory Failures Before Abandonment.
  • 5. Marginal Chance of Exploratory Success18. Full Cycle International Oil Company Net Present Value; 19. Distorted Resource Exploration: Exploration and Development Stages; 20. Tax Impact on Total Resource Value (Full Cycle); 21. Government Take (Full Cycle); V. Conclusion; References.

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