Nigeria deep offshore inland basin production sharing contract acts: evaluating contractor’s take

This study evaluates the new fiscal regime to ascertain its attractiveness and impact on contractor take. Four features (royalty, cost recovery, tax oil, and profit oil) of the PSC contract terms were used to determine contractor and government takes from the transactions. This study adopted the full range of oil prices captured in the amended DOIBPSC Act in addition to the current market price of oil estimation. Six ranges of oil price ($20/bbl, $ 0/bbl, $0/bbl, $0/bbl, $20/bbl, $160/bbl) were used to cover the five royalty sliding scales adopted in the amended DOIBPSC and the current oil price, which is ≤ $20/bbl. From the econometric analysis, estimates from the unit root tests revealed that the time series data on of the I(0) and I(1) series. The ARDL/bound cointegration test result shows that all the integrated variables are cointegrated at a 5% level.