| Popis: |
Upstream petroleum industry remains one of the most prolific in terms of technology and risk capital transfer and rewards. Consequently, governments all over the world try to formulate fiscal regimes that could favourably attract investments to petroleum provinces in their jurisdiction. Fiscal systems that are progressive tend to find a common ground for both government and the contractor by optimizing efforts and benefits. Nigeria belongs to a region of low-risk hydrocarbon discovery relative to the world average. Therefore, the government designs fiscal regimes that would seemingly extract more economic rent from the development of its petroleum resources. This paper investigates the impact of some of the technical instruments in the Nigerian PSC on rewards from deepwater investments. Discounted economic models are developed for two petroleum sharing contracts in Nigeria- the 2005 PSC and the interagency team (IAT) redraft of the 2008 Petroleum Industry Bill (PIB)-with due consideration to the three Arps’ production decline profiles. Different tangible CAPEX depreciation methods are imposed on the models and profitability indicators are estimated. Monte Carlo simulation analysis is applied to resolve the stochastic nature of some model input variables. Simulation results show that maximum reward is observed when Unit of Production (UOP) depreciation method is applied in the redraft 2008 PIB; while straight line depreciation (SLD) gives better economic metrics for the 2005 PSC keeping all the terms of the contractual arrangements constant. These results could be applied in formulation of petroleum fiscal policies like the PIB by making cost depreciation a form of incentive. It is found that for a specific fiscal contract, cost depreciation method influences economic indices when used in project evaluation. Irrespective of the production decline, UOP depreciation gives earliest contractor-payout while the net present value is negatively impacted by accelerated extraction. |
