THE REVIEW OF DEEP OFFSHORE POLICY IN THE OIL INDUSTRY AND IMPACT ON ATTRACTING FOREIGN INVESTMENTS

Abstract

As onshore field reserves get depleted, upstream activities have begun delving into new frontiers for exploration especially in deep offshore environment. The petroleum fiscal system (PFS) plays a key role in investment decision in the exploration and production (E&P) of oil and gas. It provides a synopsis of the relationship between the host government, the investors, and the community stakeholders with regards to the equitable recovery of costs and distribution of profits. Governments design fiscal systems to entice investment and collect as much economic rent as possible from their petroleum acreage, which is determined by factors such as its geological endowment. In deep offshore environments, governments are often faced with the difficult task of finding a balance between making money and attracting foreign investment. A detailed review of deep offshore fiscal regimes becomes imperative because it affects different stakeholders in making informed decisions on the petroleum business investments worldwide. This paper highlights deep offshore fiscal policy in seven different countries scattered across the globe and demonstrates the impact, they had in attracting foreign investment.