Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/161829
Authors: 
Osmundsen, Petter
Løvås, Kjell
Emhjellen, Magne
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6390
Abstract: 
The recent dramatic fall in oil prices has led to extensive capital rationing in international oil companies, and subsequent fierce competition between resource extraction countries to attract scarce investment. This situation is not adequately addressed by the large literature on international taxation and multinational companies, since it fails to take account of capital rationing in its assumption that companies sanction all projects with a positive net present value. The paper examines the effect of tax design on international capital allocation when companies ration capital. We analyse capital allocation and government take for four equal oil projects in three different fiscal regimes: the US GoM, UK upstream and Norway offshore. Implications for optimal tax design are discussed.
Subjects: 
taxation
international companies
project metrics
project valuation
oil projects
JEL: 
H21
H25
F23
Q40
G12
G31
Document Type: 
Working Paper

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