Notice of RetractionImpacts of PSC Elements on Contract Economics under Oil Price Uncertainty

Notice of Retraction

After careful and considered review of the content of this paper by a duly constituted expert committee, this paper has been found to be in violation of IEEE´s Publication Principles.

We hereby retract the content of this paper. Reasonable effort should be made to remove all past references to this paper.

The presenting author of this paper has the option to appeal this decision by contacting TPII@ieee.org.

Production sharing contract (PSC) is one of the most common types of cooperation modes in international petroleum contracts. The elements that affect PSC economics mainly include royalty, cost oil, profit oil as well as income tax. Assuming that oil price follows the stochastic process of Geometric Brownian Motion, this paper takes the net present value (NPV) and the internal rate of return (IRR) as two economic indexes and models the PSC through setting 11 different scenarios by changing the value of each contract element. Then, according to the value of NPV and IRR, we mark off different intervals and calculate the cumulative probability followed by comparative analysis of how the changes of different elements influence the contract economics. The study concludes that the impacts of income tax and profit oil are more significant than the royalty and cost oil, while a tax holiday could improve the company´s financial status significantly under oil price uncertainty.