Yes, it is the way that a lot of oil is produced. Thanks to a little direct foreign investment allowing richer nations to establish operations in poorer nations to allow both of them to profit. There are foreign companies that offer these investments by way of machinery and technology that might not otherwise be available. Britain reaped a lot of the reward from the oil produced out of Iran, we now have some of the profits from oil out of Iraq, though there are almost a countless number of interminglings between nations. Though the real answer depends on what you mean by share. Because the answer could easily just as well be no, no nations truly share in profits. But some do work together, in questionable partnerships, to produce and profit off of the black gold.
Quite a few nations have a national oil company, owned by the government, which is the only company allowed to explore in that nation, so there is no other sharing. Examples that are more or less entirely exclusive include Pemex (Mexico), PDVSA (Venezuela), and Saudi Aramco (Saudi Arabia).
In other nations the national oil company (which may or may not be 100% government owned) may get preferential treatment, but partnerships can be established. Examples include Petrobras (Brazil) and the Nigerian National Oil Company. In Nigeria, outside companies can also explore on their own; they would typically pay an up-front fee for the right to explore. Then, if they find any oil, 50% of the revenue goes to Nigeria. Depending on where it is, there is then an additional tax up to 12%. So, after finding and producing costs are added to those taxes, it is not unusual for an oil company such as Shell in Nigeria to have revenue of $15 per barrel or less even when the price is $80 per barrel. That’s before any transportation costs or refining.
Sometimes the competition is more like a free market, between multiple companies. Then, the amount of “sharing” is highly variable. For example, Russian production sharing agreements were in some cases very favorable, at 6% to the government. Then when a company found oil, they changed the rules so that the government share was more than 75% – a rate that in some cases makes exploration and production uneconomical for outside companies.
Click here to cancel reply.
Sorry,At this time user registration is disabled. We will open registration soon!
Don't have an account? Click Here to Signup
© Copyright GreenAnswers.com LLC