Modeling the Impact of Taxes on Petroleum Exploration and Development

Author/Editor: James L. Smith
Publication Date: November 27, 2012
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: We present a simple model of petroleum exploration and development that can be applied to study the performance of alternative tax systems and identify potential distortions. Although the model is a highly simplified, it incorporates many factors and some of the key tradeoffs that would influence an investor’s investment behavior. The model recognizes the role of enhanced oil recovery and treats the impact of taxation on exploration and development in an integrated manner consistent with an investor’s joint optimization of investments at both stages of the process. The model is simple and user-friendly, which facilitates application to a broad range of problems.
Series: Working Paper No. 12/278
Subject(s): Taxes | Oil production | Taxation | Economic models

Publication Date: November 27, 2012
ISBN/ISSN: 9781557754455/1018-5941 Format: Paper
Stock No: WPIEA2012278 Pages: 46
US$18.00 (Academic Rate:
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