Accounting for Depletion of Oil and Gas Resources in Malaysia

Jamal Othman and Yaghoob Jafari

No 100690, 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia from Australian Agricultural and Resource Economics Society

Abstract: This paper provides an assessment of the changes in the availability of oil and gas resources in Malaysia. The physical and monetary balance sheets for crude oil and natural gas for the period 2000- 2007 was constructed. The net present value of expected future incomes to reflect the value of resource change was calculated based on a physical extraction and a resource rent scenario. Resource rent is gross operating surplus less the estimated user cost of produced capital in the crude oil and natural gas extraction industry. We obtained the gross operating surplus by subtracting the value of consumption of employees and net taxes on production cost from the value added of petroleum domestic products. Our findings noted serious reduction of oil reserves from 2001 – 2005, due to changes in crude oil prices, and thereafter the depletion rate decreased. Malaysia has depleted her natural gas reserves mainly in 2004 and 2005. Changes in reserves values were attributable more to price changes and new discoveries. Further, our study shows that the royalty rate paid by the state oil company, Petronas was far less than the estimated resource rent.

Keywords: Environmental Economics and Policy; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 19
Date: 2011
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Accounting for Depletion of Oil and Gas Resources in Malaysia (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare11:100690

DOI: 10.22004/ag.econ.100690

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