DocumentCode
2398112
Title
Notice of Retraction
Impacts of PSC Elements on Contract Economics under Oil Price Uncertainty
Author
Wang Zhen ; Zhao Lin ; Liu Mingming
Author_Institution
China Univ. of Pet., Beijing, China
fYear
2010
fDate
7-9 May 2010
Firstpage
2708
Lastpage
2711
Abstract
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.
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.
Keywords
Brownian motion; contracts; economics; petroleum industry; pricing; stochastic processes; contract economics; cost oil; cumulative probability; economic index; geometric Brownian motion; income tax; internal rate of return; international petroleum contracts; net present value; oil price uncertainty; production sharing contract; profit oil; royalty; stochastic process; tax holiday; Companies; Contracts; Economics; Mathematical model; Petroleum; Production; Stochastic processes; International Petroleum Cooperation; Oil Contract; Oil Price; Production Sharing;
fLanguage
English
Publisher
ieee
Conference_Titel
E-Business and E-Government (ICEE), 2010 International Conference on
Conference_Location
Guangzhou
Print_ISBN
978-0-7695-3997-3
Type
conf
DOI
10.1109/ICEE.2010.684
Filename
5590725
Link To Document