Controlling Contractor's Rate of Return (ROR) in Risk Service Contracts with R-Factor Mechanism
Article from: OGEL 1 (2018), in Contract Management, International Petroleum Contracts
Abstract
In drafting petroleum contracts with an effective fiscal regime, it is paramount for negotiators to ensure that the expected benefits to clients are secured and managed. An effective fiscal regime means the fiscal regime prevailing on the cash flow of the project taking into account any and all contractual and legal elements and categories of costs and revenues of the project over a given time period. In practice, the fiscal parameters of a petroleum contract could either be regressive or progressive depending on whether the net-of-cost to income for the government grows faster than ...