Petroleum taxation. The effect on recovery rates

Aksel Hiorth and Petter Osmundsen

Energy Economics, 2020, vol. 87, issue C

Abstract: Petroleum tax design analysis usually abstracts from the fact that taxation affects not only project selection but also concept design and drainage strategy, and thereby the extraction and recovery rate. The implicit assumption is that oil companies are unresponsive to tax changes where concept selection and production decisions are concerned. In his novel approach, Smith (2014) develops a broader model which accounts for the additional effects. This provides a consistent framework which permits analysis of specific settings. Berg et al. (2018) apply the model to establish the effect of a reduction in uplift on the Norwegian continental shelf (NCS) and find, for this case, that the traditional assumption of an unresponsive company still holds.

Keywords: Petroleum taxation; Extraction rate; Drilling incentives (search for similar items in EconPapers)
JEL-codes: H21 H25 M21 Q32 Q35 Q38 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:87:y:2020:i:c:s0140988320300591

DOI: 10.1016/j.eneco.2020.104720

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