Investigating tax distortions:

an applied model of petroleum exploration and extraction decisions

Andon J. Blake

    Research output: Contribution to journalArticle

    3 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 languageEnglish
    Pages (from-to)66-90
    Number of pages25
    JournalNatural Resource Modeling
    Volume26
    Issue number1
    DOIs
    Publication statusPublished - 2013

    Keywords

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

    Cite this

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    title = "Investigating tax distortions:: an applied model of petroleum exploration and extraction decisions",
    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.",
    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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    language = "English",
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    }

    Investigating tax distortions: an applied model of petroleum exploration and extraction decisions. / Blake, Andon J.

    In: Natural Resource Modeling, Vol. 26, No. 1, 2013, p. 66-90.

    Research output: Contribution to journalArticle

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    KW - MEXICO

    KW - DEPLETION

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    KW - distortions due to taxation

    KW - Petroleum model

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