Course Description
One of the first things geologists, engineers, landmen, lawyers, and economists encounter in the international sector of the petroleum industry is the diversity of fiscal systems. Countries are vastly unique in the way they structure their taxes, and natural resource taxation can be complicated.
This course provides an in-depth study of the details and dynamics of petroleum fiscal system analysis and design in the context of an increasingly competitive global marketplace. The course provides all of the basics as well as new analytical techniques including both theory as well as established practices worldwide. All governments have their own particular boundary conditions, concerns and objectives and this course shows how to assess various situations in the context of a country's objectives.
Course materials consist of the book, "International Petroleum Fiscal Systems and Production Sharing Contracts" (Daniel Johnston, PennWell Books 1994) and a 360+ page "Workbook". These materials include over 100 tables, figures, illustrations and worksheets dealing with the philosophy, theory, arithmetic and mechanics as well as analytical methodology for various fiscal systems and fiscal elements found around the world.
The focus of the course is on the factors that drive exploration economics: risk/reward, capital requirements, terminology etc. This provides an excellent basis for understanding the unique aspects of development and production economics. Both industry and government points of view are addressed. A complete grasp of the subject requires an understanding of the dilemmas and concerns of both sides. However, there is also fertile ground in the philosophy of petroleum taxation. Legal and operational aspects of contract/fiscal terms are also examined to provide a foundation in the dynamics of international negotiations.
The course is designed for those interested in petroleum taxation, international negotiations, and the finer points of economic modeling in the international arena. Much of the subject has evolved within just the past 20 years, yet some aspects of taxation are timeless. The terminology has changed over the years and will continue to develop. The course is designed to clarify the language of negotiations and fiscal system design.