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 P...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.展开更多
基金financial support from Key Projects of Philosophy and Social Sciences Research of Ministry of Education (09JZD0038)
文摘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.
