How governments tax petroleum-- Will it change?. Pedro van Meurs Thursday, March 15, 2007 BEAR STEARNS Van Meurs Corporation Nassau, Bahamas Tel: (242) 324-4438 e-mail: firstname.lastname@example.org. How governments tax petroleum-- Will it change?. YES. Government Take Trends.
Pedro van Meurs
Thursday, March 15, 2007
Van Meurs Corporation
Tel: (242) 324-4438
The “government take” on oil and gas consists of many components:
The “government take” is the total of all these payments as a share of the profit (before government take).
Three phases since 1974:
1974 – 1984: strong increases in government take:
-- Increase in oil prices
-- Reduction in acreage through nationalizations
1984 – 2003: decreases in government take:
-- Decrease in oil prices
-- Expansion of acreage (political, privatizations, technology)
2003 – 2007: increases in government take:
-- Increase in oil prices
-- Reduction of acreage (partial re-nationalizations, political restrictions)
** Eastern Europe
** Former Soviet Union: Russia, Kazakhstan, Turkmenistan, Azerbaijan
** Venezuela, Peru, Brazil, Argentina, Bolivia, Cuba, Mexico
** China, Mongolia, Myanmar, Cambodia, Vietnam, India
** Saudi Arabia, Iran, Qatar
Remaining: Kuwait ?, Iraq ?
** Rapid development of deep water technology
** New and improved pipelines opened inland basins: Bolivia, Siberia, Chad and Sudan
** Improved LNG technology makes gas now a world wide commodity
Many nations lowered their government take:
** North Sea: UK, Norway, the Netherlands, Denmark
** North America: Canada, USA,
** Latin America: Peru, Bolivia, Argentina
** Asia: Pakistan, Thailand, Malaysia.
** North Africa: Algeria, Egypt
** Africa: Nigeria, Congo, Gabon, Angola
Since 2003 oil and gas prices are increasing
Acreage expansion has now reached a saturation point - Most petroleum basins are now accessible. No more new previously unexplored or unavailable acreage is coming on the market.
In fact, political developments are now reducing acreage availability or making acreage less attractive: Russia, Iraq, Iran, Venezuela, Bolivia
Result: Government take on oil is increasing again
Increase in government take on oil is taking place along four different paths:
** Fiscal systems are adjusting automatically upward because of the progressive structure of some systems: Angola, Malaysia, Trinidad and Tobago, Russia and India
** Governments are changing fiscal terms: UK, Alaska, Algeria and Kazakhstan. Alberta is now conducting a royalty review
** Companies are bidding up government take in bid rounds: Libya, India
** Partial re-nationalizations: Russia (Gazprom), Venezuela, Bolivia
Government take trend for gas is less clear.
Still considerable stranded gas reserves exist around the world.
Therefore government takes for gas in some countries may stabilize or continue to decline and governments may instead seek greater market access: Qatar, PNG, Peru, Venezuela, Norway, and Egypt.
Nevertheless some other governments are increasing government takes on gas: Nigeria, Russia, Bolivia and Algeria.
Private petroleum companies may gain access to large resources through political change:
Special terms for:
The main new trends for oil and gas fiscal systems are: