Fiscal Stability: To What Extent Can Flexibility Mitigate Changing Circumstances in a Petroleum Production Tax Regime?
Article from: OGEL 2 (2007), in Taxation
Abstract
Stability in the fiscal regulation is a necessary element to create an enabling atmosphere for petroleum investment. The instability of fiscal obligations increases the inherent risks which companies are faced with, as well as scares off potential investors. Due to the huge financial implication which the extractive industry requires and the long period of capital return, there is a desire by the foreign oil companies (FOCs) to see that the terms of contracts are respected by the host government (HG) throughout the life of the project. This paper seeks to examine how fiscal ...