Insight
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11 Pages

Fiscal competitiveness: when $50 is only $25


Fiscal competitiveness: when $50 is only $25

Report summary

Companies are preserving capital and high grading opportunities as they work to reduce breakevens on new projects. Only the lowest cost and highest return investments will get the green light in this environment. But generating profits at current prices is not simply down to a company's ability to control costs. Governments have a role to play too. With capital scarce, the level and timing of the government's share of revenue comes to the fore. Terms must be competitive if the government is to have any success in attracting new investment. As a result, governments around the world are reviewing their fiscal terms and they have some big decisions to make. How do we remain 'competitive', while retaining a 'fair share'? Do we target the fiscal system on revenues or profits? Do we fix the fiscal terms to allow companies to bid them? How do we assure investors that terms will remain stable in the future? We consider each of these issues in this Thought Leadership report.

What's included?

This report includes 1 file(s)

  • Fiscal competitiveness: when $50 is only $25 PDF - 594.12 KB 11 Pages, 0 Tables, 7 Figures

Description

This Macroeconomics and Global Trends Insight report presents our research on this key topic, and draws out the implications for economies and commodity markets.

This report delivers a clear understanding of our unique global economic outlook and identify risks and uncertainties to watch out for.

Wood Mackenzie's global trends and macroeconomic analysis underpins all our commodity demand analysis, ensuring we continually deliver an integrated and consistent view.

Our comprehensive understanding of commodity markets gives us a unique insight into the pace of global development and the risks associated with it.

  • Executive Summary
  • Being ‘competitive’
  • Getting a ‘fair share’
  • Revenue or profit sharing?
  • Fixed or biddable fiscal terms?
  • Fiscal stability
  • Conclusions
    • References

In this report there are 7 tables or charts, including:

  • Executive Summary
    • Fig 1: Effective Royalty Rate (ERR): government’s share of revenue before costs can be recovered
  • Being ‘competitive’
    • Fig 2: Fiscal attractiveness vs prospectivity – global comparison of regimes
  • Getting a ‘fair share’
    • Fig 3: Fiscal policy and Expected Monetary Value (EMV)
  • Revenue or profit sharing?
    • Fig 4: ‘Fiscal deterrence’ under revenue and profits based fiscal systems
    • Fig 5: Breakeven gross revenue share and price/cost sensitivity under new Indonesian system
  • Fixed or biddable fiscal terms?
    • Fig 6: Mexico’s 2nd Shallow Water Round (2017): winning bids
  • Fiscal stability
    • Fig 7 Annual oil price inflation/deflation
  • Conclusions
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