Responses to the fall in the price of crude oil have seen companies cutting costs and reviewing opportunities whilst governments are being forced to re-evaluate fiscal regimes.
The Fiscal Consulting Offering from Wood Mackenzie is based on a deep understanding of the challenges facing governments and the industry. Our advice to governments will help them to optimise their revenue stream, whilst when advising companies we can assist them in determining what areas of fiscal change would best meet their business drivers.
How should governments and companies respond to the current market?
Companies need to understand how regimes compare and how returns respond to changes in regimes. For many governments their main challenge is how to make their budgets balance under a low price environment, but still ensure that investment in their natural resources sector continues. This is becoming a delicate balancing act and governments are continuously asking themselves:
- Are fiscal terms ‘Fit for Purpose’?
- How should I review fiscal terms?
- What is the peer group against which comparisons should be made?
- How do fiscal terms compare with those of the peer group?
- How best can inward investment be encouraged?
- Is there scope to increase the current level of take or is a reduction in the level of take necessary?
- How to ensure that staff have a suitable knowledge base?
Based on a deep understanding of the industry and your unique drivers, we can help you:
- Determine a peer group of comparable jurisdictions
- Benchmark your terms against this peer group
- Analyse fiscal trends and drivers for change
- Evaluate fiscal terms and their economic impact
- Design and Implement terms that are 'Fit for Purpose'
- Negotiate privatisation or licensing rounds
- Train employees on fiscal systems and valuations
Our consulting case studies showcase examples of how we have helped clients achieve outstanding results.
More from the Fiscal Team:
India's new fiscal terms are being challenged. Can it revive investment interest in the struggling upstream sector? Find out more.
Do lower oil prices lead to lower oil tax rates?
Are North American fiscal terms 'fit for purpose' at current low oil price levels?
Back to the future: If governments don't offer better terms, will the industry stop investing?