Sharing the Oil Rent: Current Situation and Good Practice

About 60 years ago, a cartel of oil companies was in a position to dictate its conditions to oil-producing states. The creation of OPEC, and the improvements in contracts greatly helped to rebalance the conditions of the sharing of the oil rent. Today, producer states can obtain contractual terms an [...]
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About 60 years ago, a cartel of oil companies was in a position to dictate its conditions to oil-producing states. The creation of OPEC, and the improvements in contracts greatly helped to rebalance the conditions of the sharing of the oil rent. Today, producer states can obtain contractual terms and settings that favorably improve their share of the rent, provided they analyze their objectives and their strengths. This book describes the evolution of the oil rent-sharing mechanisms over the years including how the upstream exploration-production industry functions and the three types of oil rent. It clarifies the issue of reserves, both from the techno-economic and the political aspects. It describes the two main contractual forms that a producer state can use when dealing with an international oil company, the organizational choices offered to a producer state trying to maximize its underground hydrocarbon potential, the historical developments of contractual modalities, and some recommendations to states on the pros and cons of various contractual options. This book will be useful to readers willing to understand the issues linked to oil-rent sharing as well as to professionals (education, industry) who want to develop and deepen their knowledge of the subject.