Production sharing contract: An analysis based on an oil price stochastic process

Assuming that oil price follows the stochastic processes of Geometric Brownian Motion （GBM） or the Mean-Reverting Process （MRP）, this paper takes the net present value （NPV） as an economic index and models the PSC in 11 different scenarios by changing the value of each contract element （i.e. royalty, cost oil, profit oil as well as income tax）. Then the NPVs are shown in probability density graphs to investigate the effect of different elements on contract economics. The results show that under oil price uncertainty the influence of profit oil and income tax on NPV are more significant than those of royalty and cost oil, while a tax holiday could improve the contractor＇s financial status remarkably. Results also show that MRP is more appropriate for cases with low future oil price volatility, and GBM is best for high future oil price volatility.

Modeling China's offshore production sharing contracts using meta analysis

Production sharing contracts have been used in the development of China’s offshore petroleum resources since 1982, but the mechanism in which the fiscal terms impact project economics is complicated and not well understood. The purpose of this paper is to model China’s offshore production sharing contracts using a probabilistic approach. Cash flows and economic indicators are used for a typical offshore oilfield development, and meta-models are constructed to analyze the basic features of the fiscal system. Applications of the models in contract negotiation are discussed.

Detection of Gluten in Dishes Offered as Gluten-Free in a Gastronomic Area Located in San José, Costa Rica

Celiac disease, gluten sensitivity and gluten intolerance are health conditions that require consumers to avoid their gluten intake. In Costa Rica, Law 8975 regulates the amount of gluten permitted in prepackaged products labeled as “gluten-free”, but the parameters to be followed are not mandated for food service operations. This study investigated whether restaurants with gluten-free (GF) options in a gastronomic area of the city of San José, Costa Rica, achieved the requirements of the legislation that the dishes offered should contain less than 20 ppm gluten. Using data collected from five restaurants offering GF dishes, two provided dishes with quantities of gluten greater than 20 ppm (restaurant A, four samples and restaurant B, three samples);particularly dishes from the category “meat with sauce”. Although those dishes are naturally gluten-free, when they are handled in areas of shared production, they are exposed to the risk of cross contact, furthermore the adding of misscellaneous such as: marinades, sauces and condiments, which could contain traces of gluten or hidden gluten, a risk associated with the use of ingredients without certification GF (supplier’s practices and label declaration). Therefore improvements in food service procedures should be enforced. The findings of the present study emphasize the need to include restaurant foods in the relevant legislation to ensure that the gluten-intolerant sector of the population remains safe when eating out.

On Some Issues of Assessing the Efficiency of Renewable Energy Power Plants and the Share of Renewables in the World＇s Electricity Generation

The paper considers some issues related to the evaluation of power plants using renewable energy sources： energy efficiency, economic efficiency, the share of renewable energy in the world＇s electricity generation. At one time in the world there was a myth that more energy is expended on the construction of wind and photoelectric power stations, than they produce for the service life. Adherents of this myth are still found in Russia. In response to this myth, numerous studies have been carried out for the manufacturers of wind turbines and photovoltaic modules. It was proved that these power plants spent energy on them are produced within a period of less than a year and the energy consumed by them cannot be taken into account, since it is renewable. The author showed that power plants on organic fuel and existing nuclear plants using depleted fuel with a coefficient less than unity fundamentally cannot compensate for the energy used during their construction. In the world, the concept of the LEC （Levelized Energy Cost） produced by any power plant is widely used to estimate economic efficiency. However, the formula for determining it, in the author＇s opinion, contains an inaccuracy, which is proposed to be eliminated. At present, there are different opinions on the role of RES （Renewable Energy Sources） in the production of electricity. A summary indicator is the share of renewable energy in the world＇s electricity generation. The determination of the actual share of RES and the forecast of its growth is of significant importance for the development of the world economy. The author shows the differences in the estimates and suggests an approach for establishing agreed estimates.

Global Production Sharing and Sino-US Trade Relations

This paper examines Sino-US trade relations, focusing on the ongoing process of global production sharing, involving splitting of the production process into discrete activities that are then allocated across countries, and the resulting trade complementarities between the two countries in world manufacturing trade. The results suggest that the Sino--US trade imbalance is basically a structural phenomenon resulting from the pivotal role played by China as the final assembly centre in East Asia-centered global production networks.

China＇s Opening up after 40 Years： Standing at a Historic Turning Point

This paper comprehensively reviews China＇s openness since 1978 from three aspects： trade, foreign investment and global production sharing. We point out that the economic development of China is now standing at a historic turning point. Specifically, economic changes in China are discassed from four dimensions： （i） from China being a world assembly line to a world manufacturing powerhouse; （ii） from China being a world capital receiver to a world investor; （iii） from China being a world factory to a world market; and （iv） from the situation of ＂made in China＂ to ＂innovated in China.＂ At the same time, the global economic system has also reached a turning point. A ＂North America-Europe-Asia ＂ tri-polar system has formed, in which the USA, Germany and China, respectively, serve as the regional core economies.

Comparative risk evaluation and sensitivity analysis of the Libyan EPSA IV and its modified model LEPSA I

This paper extends the analysis of the fourth model of Exploration and Production Sharing Agreement(EPSA IV)and our proposed modification of the Libyan Exploration and Production Sharing Agreement(LEPSA I)to field applications.The paper focuses on risk evaluation and analyzing the sensitivity of the fiscal terms of EPSA IV model(cost recovery,A factors,and B factors)and the fiscal terms of LEPSA I model(initial production share,the geologic probability of success,and the oil reference price)on the profitability indicators of Net Present Value(NPV)and Internal Rate of Return(IRR).The deterministic analysis method and stochastic analysis method using the Monte Carlo Simulation have been used in this study.The two methods were used to show the probability distribution of the NPV and IRR on the basis of the random variables of fiscal terms in the two models of EPSA IV and LEPSA I,respectively.The simulation output of the development field scenario of enhanced oil recovery using CO2 injection showed that the cost recovery is a very sensitive term on the NPV and IRR in the EPSA IV model.But,the A and B factors in the EPSA IV model have different sensitivities on the NPV and IRR.The B factor 3 and B factor 1 are more sensitive on the NPV and IRR than are other factors.The B factor 4 and A factor 4 have shown less effect on the NPV and IRR than the other factors.Moreover,the simulation output showed that the initial share and reference price are more sensitive to the NPV and IRR than the probability of success on the basis of the LEPSA I model.

Renminbi Appreciation and China's Industrial Upgrading

To identify the macroeconomic environment that has enabled China's industrial upgrading during a period of persistent renminbi appreciation,we construct a two-country New Keynesian model of industrial upgrading with a global production network,endogenous firm entry,and a directed quality frontier.We show that renminbi appreciation promotes industrial upgrading without hurting real economic growth in the longer run.This holds true especially through four channels.First,the quality threshold for firm entry is lower to allow for more firms participation and thus greater product varieties(quality threshold channel).Second,upstream skill-based production uses more imported inputs of higher quality(imported input channel).Third,there is substantial global demand towards the exports of high-quality inputs(global demand channel).Fourth,domestic inputs are competing against imported inputs to broaden the scope for competition in the upstream product market to incentivize quality upgrading(scope for competition channel).