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Comparative Studies | Mining | Ghana | Volume 12 Issue 12, December 2023 | Rating: 5.3 / 10
Concession (License) and the Production Sharing Agreement: Lessons for the Way Forward in Achieving Balanced Benefits to Host Countries and Investors in the Petroleum Sector
Hussein Salia, Bayuasi Nammei Luki, Abdallah Ali-Nakyea, Esther Asiedu
Abstract: The paper presents a discourse analysis of the various International Petroleum Agreements. It highlights the main features and clauses of these IPAs. This literature review paper seeks to evaluate and compare different types of IPAs in different countries.It concludes that most developed oil producing countries prefer the concession whiles less developed oil producing countries favour the Petroleum Sharing Agreement. The study also found that there is no one generally accepted method used to evaluate and compare different types of contracts in different countries. The attractiveness of the fiscal terms in a country does not depend on the fiscal regime or its specific provisions but a combined effect of its fiscal terms. From the evaluation, it was concluded that there is a lacuna between discounted and non-discounted calculations and simulations. This means that the project itself is on the red line and the host country can get more revenue by imposing taxes, bonuses and other fees on the contractor, including where the contractor is almost running into negative figures. To overcome the defect of this indicator to reflect the combination of the fiscal terms realistically based on the evaluation and proportion of the host country?s take, front-loading index of the contractor can be used to reflect the effect of the time sequence differences of the host country on the project and the contractor's profit. The study is the first of its kind and the lessons are expected to guide the way forward in achieving balanced benefits to host countries and investors in the petroleum sector.
Keywords: concessions, host country, license, production sharing agreement, royalty
Edition: Volume 12 Issue 12, December 2023
Pages: 1278 - 1286