IMPLICATIONS OF PRODUCTION DECLINE PATTERNS, COST DEPRECIATION METHODS AND FISCAL REGIMES ON OFFSHORE PROFITABILITY IN NIGERIA

📄 Project Abstract

Upstream petroleum industry remains one of the most prolific industries in terms of technology and risk capital transfer. Consequently, governments all over the world try to formulate political as well as economic structures that could favourably attract investments to their petroleum provinces. These structures are spelt out in their petroleum fiscal systems. A good fiscal system tends to find a common ground for both government and the contractor by way of optimizing both efforts and benefits. Nigeria belongs to a region where hydrocarbon discovery risks are low compared to the world average. Therefore, the government designs fiscal regime that would seemingly extract more economic rent than normal from her petroleum resources. This research effort examined how to evaluate E & P business and determine the profitability of upstream business venture under the proposed petroleum industry bill (PIB). The methodology adopted a typical Niger-Delta offshore field with vast proved reserves, ...