Monte carlo Risk Analysis of oil and gas field development in UKCS:: An overview of the effect of change in current tax system on small, medium and large field development in the UKCS - Softcover

Akinwale, Yusuf Opeyemi

Softcover

ISBN 10: 3846555878 ISBN 13: 9783846555873

Publisher: LAP LAMBERT Academic Publishing, 2011

Synopsis

This thesis analyses three hypothetical oil and gas field projects under three different price scenarios before and after budget 2011 in the UKCS. The findings, using DCF technique and Monte Carlo simulation, suggest that the increase in supplementary charge will impair the companies’ cash flow which will affect the exploration effort and render marginally profitable field unviable. This will lead to reduction in government tax revenue in the long run if investments are discouraged. The result of the findings show that UKCS tax system is proportional as government takes the same percentage even when the price is lower. The impact of the proportional tax will be felt more on the gas project because of the general low level of the gas price. The increase in ring fence expenditure supplement rate from 6% to 10% reduces the negative impact of the tax by supporting the new players in investing in the UKCS. As production declines and development cost per unit rises in the North Sea, there is need for a swift fiscal policy that can sustain competitiveness with other oil and gas provinces.

About this title

About the Author

Mr Akinwale Yusuf Opeyemi is a first class economics graduate of Obafemi Awolowo University, Nigeria in 2005. He graduated as the best graduating student in the faculty of social sciences. He had MBA(Finance) from the same university. He worked as a Credit Analyst in Equitorial Trust Bank from 2007 to 2010.

Edition details

• Publisher: LAP LAMBERT Academic Publishing
• Publication date: 2011
• Language: English
• ISBN 10: 3846555878
• ISBN 13: 9783846555873
• Binding: Paperback
• Number of pages: 88