Investigating tax distortions:: an applied model of petroleum exploration and extraction decisions

Andon J. Blake

doi:10.1111/j.1939-7445.2012.00121.x

Investigating tax distortions: an applied model of petroleum exploration and extraction decisions

Andon J. Blake

Research output: Contribution to journal › Article › peer-review

5 Citations (Scopus)

Abstract

A numerical model is proposed for the testing of distortions caused by petroleum fiscal systems on the exploration and extraction activities of a profit-maximizing firm. Traditional models have not been capable of testing for the distortions caused by the complex tax structures most often used by governments. Two tax combinations, as well as certain other taxes, are analyzed for distortions in the model. The model is parameterized using generic data because specific jurisdictions are not considered. The distortions due to rentals and royalties are as expected by theory. Property taxes show a new distortion result where production tilting is ambiguous.

Original language	English
Pages (from-to)	66-90
Number of pages	25
Journal	Natural Resource Modeling
Volume	26
Issue number	1
DOIs	https://doi.org/10.1111/j.1939-7445.2012.00121.x
Publication status	Published - 2013

Keywords

GULF
EXHAUSTIBLE RESOURCES
TAXATION
BASIN
UNCERTAINTY
petroleum taxation
NATURAL-RESOURCES
MEXICO
DEPLETION
APPRAISAL
distortions due to taxation
Petroleum model
ECONOMICS

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10.1111/j.1939-7445.2012.00121.x

Cite this

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abstract = "A numerical model is proposed for the testing of distortions caused by petroleum fiscal systems on the exploration and extraction activities of a profit-maximizing firm. Traditional models have not been capable of testing for the distortions caused by the complex tax structures most often used by governments. Two tax combinations, as well as certain other taxes, are analyzed for distortions in the model. The model is parameterized using generic data because specific jurisdictions are not considered. The distortions due to rentals and royalties are as expected by theory. Property taxes show a new distortion result where production tilting is ambiguous.",

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AB - A numerical model is proposed for the testing of distortions caused by petroleum fiscal systems on the exploration and extraction activities of a profit-maximizing firm. Traditional models have not been capable of testing for the distortions caused by the complex tax structures most often used by governments. Two tax combinations, as well as certain other taxes, are analyzed for distortions in the model. The model is parameterized using generic data because specific jurisdictions are not considered. The distortions due to rentals and royalties are as expected by theory. Property taxes show a new distortion result where production tilting is ambiguous.

KW - GULF

KW - EXHAUSTIBLE RESOURCES

KW - TAXATION

KW - BASIN

KW - UNCERTAINTY

KW - petroleum taxation

KW - NATURAL-RESOURCES

KW - MEXICO

KW - DEPLETION

KW - APPRAISAL

KW - distortions due to taxation

KW - Petroleum model

KW - ECONOMICS

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SP - 66

EP - 90

JO - Natural Resource Modeling

JF - Natural Resource Modeling

IS - 1

ER -

Investigating tax distortions: an applied model of petroleum exploration and extraction decisions

Abstract

Keywords

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