Comparative Performance Analysis of Petroleum Sharing Contracts in Angola, Equatorial Guinea, Gabon And Nigeria

Abstract

Abstract Petroleum Fiscal System (PFS) is a key determinant of investment decision in the exploration and production (E&P) of oil and gas. It describes the relationship between the host governments, the investors, and community stakeholders with respect to how costs are recovered and profits are shared equitably. A comparative economics of the performance of fiscal regimes becomes imperative as it affects stakeholders in making informed decisions on the oil and gas business investments worldwides. This paper evaluates the structure, conduct and performance of PFS in Gabon, Equatorial Guinea, Angola and Nigeria in the Gulf of Guinea (GOG). These countries hold about 90% of the GOG proved reserves. Economic analysis of the same E&P phases using hypothetical field and cost data under the different PFS are presented and discussed for comparative PFS performance evaluations. Comparison of the effects of production delay, front loaded government take and taxation shows that petroleum sharing contract fiscal terms and instruments in Gabon, Equatorial Guinea, Angola and Nigeria are relatively competitive. We found that as the risk in deepwater investment increases with water depth, return on investment rises in these GOG countries. Monte Carlo simulation process incorporated to account for risk and uncertainties reveal early discounted payout for investors in these GOG countries with significant degree of ceteris paribus.