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Title: Petroleum taxation : a critical evaluation with special application to the UK continental shelf
Author: Nakhle, Carole
ISNI:       0000 0000 5115 7156
Awarding Body: University of Surrey
Current Institution: University of Surrey
Date of Award: 2004
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This thesis provides a framework of economic analysis which both Governments and the petroleum industry can draw upon in their negotiation of fiscal terms that offer a fair and just basis of wealth allocation. Its principal objectives are to critically evaluate the petroleum fiscal regime in the UK North Sea since 1975, and identify a fiscal regime that is acceptable to Government and oil industry alike. Government and oil companies are the key decision-makers in the upstream sector of petroleum industry. However, their individual focus is one of competing rather than complementary objectives. Governments of oil producing countries face important challenges when designing a tax system that meets the two fundamental objectives of ensuring a fair share of revenues for themselves whilst simultaneously providing sufficient incentives to encourage investment. Besides, petroleum resource has special features that can impose further difficulties in the design and implementation of an appropriate tax system aimed at achieving a balance between both Government and industry interests'. Over the years, achieving this balance has given rise to significant controversy in the UK. The structure of the current fiscal regime was formally legislated through the Oil Taxation Act of 1975. However, the regime has been frequently reviewed and amended. Its current structure is significantly different from its original version. Th~ various amendments to the regime have led researchers and specialists to either criticising or supporting Government actions.This thesis conducts an in depth analysis on the principal fiscal packages that have applied to the UKCS and analyses their effect on the balance between the Government and oil companies' objectives. The research is carried out in the light of an essential and timely feature, the current maturity of the UK oil province. The thesis demonstrates that, in practice, it is very difficult to develop an ideal fiscal package. Several complications are associated with petroleum taxation, resulting mainly from the difficulty in determining a suitable tax base as well as the inevitable compromises to the criteria that are required to categorise an optimal tax. Consequently, it is not surprising to find that none of the tax instruments proposed in previous studies or those applied in the UK represents an optimal tax. The UK petroleum fiscal regime suffered from several limitations. However, currently, the UK fiscal regime is one of the most attractive regimes in the world, from an investor's standpoint. Government take is lower than the pre-1993 fiscal structures, but any future concerns about UKCS taxation must take into account the current maturity of the petroleum reserve base. A high level of Government take is not recommended in cases of high-risk exploration, high-cost development, or for those provinces with modest petroleum potential, as is the case in the UK North Sea.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available