Oil and Gas Paper - Essay Example

Comments (0) Cite this document
Summary
Oil and Gas When there are optimal opportunities in the foreign markets, organizations breaking geographical and economical boundaries will enter those countries. However, before or during the entry, various factors in those countries will facilitate as well as impede the organization’s entry…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.6% of users find it useful
Oil and Gas Paper
Read TextPreview

Extract of sample "Oil and Gas Paper"

Download file to see previous pages This mode has both advantages and disadvantages, so apt clauses have to be incorporated into the agreement, to avoid any risks. After that, Atlantic Oil has to adopt feasible and effective funding options, and also have to carry out their operations without any negative impact on the environment. Production Sharing Agreements (PSA) – Advantages, disadvantages and Clauses A change to the dominant form of contract has occurred in the oil industry, with the previously followed concession agreement giving way to the production sharing agreement.2 Production sharing agreements (PSA) are a type of contract which is signed between the government, in this case Polenskya’s government, and the oil exploration company or Atlantic Oil, regarding the extraction process and the how the extracted oil and its profits can be shared. That is, as oil and gas deposits are usually owned by the country concerned, it is common for the country to enter into a production sharing agreement with an oil company, so the specific company can do the financial investment for the extraction process, extract the oil or gas, sell it and through it recover their initial investment, and then share the production as well as the profits with the government.3 With this agreement divided into two stages, recovery period and sharing period, the produced oil is also categorized into two categories, Cost Oil and Profit Oil. The Cost oil includes the produced oil or gas, which will be sold by the company themselves to recover their investments, while with the profit oil only the government and the contractor will share the profits.4 This PSA has both advantages and at the same time inherent disadvantages. Advantages One of the main advantages that will be garnered by Atlantic oil if they enter into a production agreement with Polenskya is the high degree of fiscal stability. That is, the tax structure which is in action during the signing of the PSA, as well as the certain tax concessions given to the Atlantic Oil by the government will be ‘future proof’. Thus, any overall tax changes brought on by the government in future will have no impact on the terms of the PSA, and thereby will not negatively impact the finances of Atlantic Oil. Although, certain corporate taxes are exempt from this cover, the bottom line is PSA guarantees Atlantic Oil sizable financial stability, whatever be the changes in the external environment. “The attraction of the production sharing system is that it provides the investor with a relatively stable regime in a complex and rapidly changing legal and political environment.”5 The other advantage of PSA is, it will be politically and socially more acceptable to Polenskya and in turn to Atlantic Oil as well. In countries like Polenskya, where there will be skepticism and also resistance to foreign companies, due to the mindset among the people that foreign companies will exploit the resources for their own benefits, without giving anything back to the local population.6 However, with PSA making the government the ‘co-owner’ of the operations, it will assure the people maximally and they will welcome and support Atlantic Oil completely without any apprehension of economic exploitation. Disadvantages At the same time, there are some disadvantages of this type of contract and the key one among them is the possibility of project or extraction ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Oil and Gas Paper Essay Example | Topics and Well Written Essays - 2000 words”, n.d.)
Oil and Gas Paper Essay Example | Topics and Well Written Essays - 2000 words. Retrieved from https://studentshare.org/law/1448103-oil-and-gas
(Oil and Gas Paper Essay Example | Topics and Well Written Essays - 2000 Words)
Oil and Gas Paper Essay Example | Topics and Well Written Essays - 2000 Words. https://studentshare.org/law/1448103-oil-and-gas.
“Oil and Gas Paper Essay Example | Topics and Well Written Essays - 2000 Words”, n.d. https://studentshare.org/law/1448103-oil-and-gas.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Oil and Gas Paper

International Oil & Gas Law

... Taxation, Independent Petroleum Association of America, Hancock (New Hampshire, Daniel Johnston & Co, Inc, 2008) 13 J Daniel, Changing fiscal landscape. Journal of World Energy Law and Business, (2008,) 1 M Martin, The Legal Obstacles to Foreign Direct Investment in Mexico’s Oil Sector. Fordham International Law Journal The Berkeley Electronic Press-bepress, (2009, 33, 1) 5 M Jeffrey, Financing of Oil and Gas Transactions. (2009) 10 . O William, Legal Frameworks Used to Foster Petroleum Development; Fuel Poverty Reduction (UNDP Discussion Paper) 6 R Jenik, How to Negotiate the “right” Petroleum Contract (UNDP Discussion Paper) 6 . R Pat, and M Walter, Drilling Smarter, Using...
13 Pages(3250 words)Coursework

Oil & Gas Operations Industry

...? Investment Analysis and Executive Summary This paper will assess my portfolio in the Oil and Gas industry. This is an industry that operates at a very challenging environment, characterized by frequent fluctuation of oil prices and stringent regulatory framework. More importantly, the industry has to contend with uncertainty that has characterized the recent decades. Despite these challenges, analyst have continued to forecast positive trends in this industry, particularly because the demand of gas and oil is on the rise, coupled with more advanced technology, which has improved production processes and fundamentally reduced production...
12 Pages(3000 words)Research Paper

International oil and gas law

...?International Oil and Gas Law PG work 2009 Table of Contents   Introduction                 Question A.         Question B. Question C. Conclusion             Bibliography              Introduction Oil development is an expensive activity, which requires massive resources and skillful workers. Due to its nature, oil development is mainly handled by governments and a few oil and gas exploration and production companies that possess massive resources required in oil development. This paper will discuss issues of oil development in Urbania, a country with weak financial capability and which...
16 Pages(4000 words)Essay

Oil and Gas Prices

...Oil and Gas The price of oil has constantly fluctuated through the years, but never more so than in the past ten years. This erratic trend has caused many changes to the economic and political climate. The prices of commodities have also fluctuated because of oil price changes. Political tensions between and among countries can trace their origin to oil price fluctuations. In some instances, these tensions have resulted to actual conflicts and show of arms. And in other instances, it has potentially created fodder for wars and violence. This paper shall discuss the thesis that worldwide conflict is the cause for the constant fluctuation of oil prices. History has been riddled with many incidents of oil price increases due... , with...
6 Pages(1500 words)Essay

Oil and Gas Management

...Oil and Gas Management The environment is conceived to be the natural habitat for organisms and wildlife in general. Therefore, the human population should actively ensure that there is minimum pollution possible to the environment. In relation to the protection of the environment, many countries still have a vital role to play in ensuring that pollutants are kept at bay and that the necessary control measures to pollution are installed. Oil drilling is an essential element in many oil producing countries but is turning out to be a serious concern for most environmentalists. Based on a case study in Brazil, the Pantanal case is identified as a key point as to why the...
6 Pages(1500 words)Essay

Oil and Gas Management

...Maximizing benefits from the oil and gas production in developing countries through local content participation and value addition” Introduction: Oilor black diamond is one of the most valuable assets which for the country. Presence of oil in the country gives the assurance of economic growth. However discovery of oil and gas in the country brings not only revenues but also huge amount of expectations with it. The most common assumption related with the discovery of these energy types is that it helps in easing financial stress of the economy or government with reference to budget for public or masses of the country. With the discovery of oil and gas, country will surely develop in terms of building infrastructure and basic needs... will be...
8 Pages(2000 words)Essay

Oil and gas correlation

...Oil and Gas correlation Oil and natural gas demand are basically expected to correlate due to their significant equal role in production of energy for industrialization and domestic consumption. In the early 1970s, economic reports indicates that there was a positive trend in their prices but this has since changed due to the emerging political and economic changes experienced across the world. One of the observed reasoned for the negative correlation between these two important resources can be attributed to socio, economic and political dynamics experienced across the world. The economic recovery from 1980s in the US and the world at large was accompanied by rise in...
1 Pages(250 words)Essay

Oil and gas correlation

... Oil and Gas correlation Oil and gas are substitute sources of energy are therefore plays a significant role in the globaleconomic development. It would therefore be very important to explain the existing relationship between their prices in the global market. The increasing pressure of globalization explains the observed changes in the correlation between these two prime commodities. The world politics and socio-economic changes are important in determining the trend in consumption of the two commodities (Victor 445). This includes the dollar value. It is important to note that in the past, prices of oil and gas has always moved in the same direction but this trend has sometimes indicated a reverse situation. It would therefore... be...
1 Pages(250 words)Research Paper

Oil and gas

...I have an oilfield experience because in my have studied some units that deal with Oil and Gas Management. This unit has enabled me gain a range of commercial, non-technical and technical knowhow especially in oil production as well as consumption. Because of having studied Oil and Gas Management, this has enabled me comprehend numerous opportunities, threats, processes and drivers that relate to the management of oilfields, their settings besides energy and hydrocarbon industries. From my study, I have gained adequate information in various specialists’ areas, which embrace: Risk management Petroleum economics and contracts Environmental...
2 Pages(500 words)Essay

Oil and gas industry

...organisms. To that effect, the paper will discuss the impact of the oil and gas industry on the environment. First, the operations in the oil and gas sector lead to water pollution by means of oil spills and by products. Spills can occur both on land and sea. As noted by Taylor (295), there has been evidence of oil spills on the American coastline and adjacent countries. Oil spills in the marine environment kills the aquatic ecosystem. Scholastic and Crane (6) claim that the Deepwater Horizon Spill at the Gulf of Mexico was the worst in U.S History where more than 250,000 barrels of oil...
2 Pages(500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Oil and Gas Paper for FREE!

Contact Us