Class14

Bargaining between IOCs and host countries - the issue of transparency - see Global Corruption Report 2009, chapter 3, "Corruption and Bribery in the Extraction Industries," pp. 54-57.

Concessions: IOC takes all after royalties and taxes - in practice convergence with:
Product Sharing Agreements (PSAs) - your Nigeria/Sao Tome&Principe template example (you may copy and paste!):
- signature bonus to host country
- production bonus (if oil actually discovered and produced)
- scope: time and territorial area to be explored
- minimum financial commitment of the IOC: performance bonds
- management committee
- recovery of costs if oil is dicovered ["cost oil"<80% of (Gross production minus royalty)]
- tax oil
- profit oil to IOC declines in this example from 80-20 to 25-75 as IOC recovers its costs
- train the locals
- force majeure (Clause 20)
- conciliation and arbitration
- renegotiation of contract and fiscal terms (Clause 26) = "stability clause"
Service contracts

where are the profits? (cf Exxon, 2008 Summary Annual Report)
who in the world are the production leaders? - national oil companes (NOCs) - in top 20 OGJ list of companies plus US top 20
accounting for reserves: cf Royal Dutch Shell
pricing connondrum revisited: Robert Mabro 2008 article
implications of low oil prices for IOCs -- further de-integration, cost-cutting horizontal mergers in 1990s.
implications of high oil prices for PSAs - stability clauses? - "contractual colonialism"???
"hollowing out" of IOCs?
"Beyond Petroleum" BP? - IOCs and the environment