Over the last two decades, oil and exploration companies have been incurring unexpected expenses and time in delivering mega-projects in the exploration and exploitation of hydrocarbons. The non-fulfillment of the projects in the expected time frame and allocated budgets have left petroleum firms in the brims of huge losses without the establishment of the real cause of the endured repercussion, which exceeds by more than 13% of the allocated budget(Karasalihovic-Sedlar, Barbier, & Brkic 2017, p.52). As a result, researchers and scholars in economics and oil exploration have taken research in the field to determine factors that result to over expenditure and time delays endured. Academicians and practitioners of oil producing companies have invested considerable capitals in the area to facilitate the resurgence of the oil exploitation sector and ensure that the operation and operational costs run as expected. This research is different from previous research done by other scholars on who majored on internal factors such as employee dissatisfactions and low motivation standards among the working staff for experienced financial and time overruns. However, this study provides valuable insight into external factors that affect oil and gas project management such as government taxation and resource regulations, which had limited check-on despite the petroleum and energy sector being a hugely impacted segment by nation's taxes and subsidies. Indeed, the study would facilitate the reduction of high consultation costs that oil-producing companies endure when establishing the fiscal system globally. In the end, the study will fulfill the little-covered literature in the field being a source of reference for future studies.
The fiscal system of any given nation is crucial in the determination of the amount of tax a government receives from the oil exploration process as well as in assuring profitable returns to a hired oil mining company. Each state has its own specific oil fiscal regime based on factors such as; financial status of the nation, the development of oil industry, the level of economic dependence on oil, and the level of involvement of the government in the hydrocarbon mining(Karasalihovic-Sedlar, Barbier, & Brkic 2017, p. 44). In essence, the primary objective of the study is to determine the relationship between a nation's oil fiscal regime and the behavior of oil producing company on initialization and after the boot up of exploration (Karasalihovic-Sedlar, Barbier, & Brkic 2017, p. 46). Under this, the taxation characteristics of nations under study will be analyzed while providing a cross check on the financial performance of companies awarded a contract of oil exploration. The study is meant to critically examine how the tax regimes might have prolonged or led to experienced losses with the use of criteria of neutrality, efficiency, stability, risk sharing, and stability of fiscal instruments in protection of oil mining companies in their respective states(Karasalihovic-Sedlar, Barbier, & Brkic 2017, p. 47). Finally, objects the fulfillment of knowledge gap on how externally designed fiscal system impacts on the unexpected outcomes endured with oil firms after award of hydrocarbon exploration rights.
The research methodology provides the techniques and procedures that will be used to collect data on the research topic. The method includes; the research design, instruments used to collects data, target population, sample size, data collection procedure and reliability of the information collected. For the particular problem, it is expected an analytical design to be deployed to establish the influence of ever-changing the fiscal design of oil and gases delays exploration process. The model best suits the study since it provides a holistic approach to assessment and understanding of flexibility of a particular nation's taxation system and how likely they might change the activities of oil firms. The target population for the research includes all people engaging in the exploration, transportation, refining and marketing of oil. These targets include; oil exploration companies, national government auditors, financial experts, operation managers, federal policymakers and Oil-firm accountants (Karasalihovic-Sedlar, Barbier, & Brkic 2017, p.52). Since interviews and questionnaires will be difficult to administer to the target, hindered with lack of time and budget, the study will rely on secondary sources to obtain data. The researcher will seek information on the research topic from books, journals as well as websites. An understanding of other researchers' work on the study topic will help to suitability in the choice of study procedures.
A quantitative research design that explores the relationship of variables to determine the outcomes will be exploited. In the case, data will be obtained exclusively from secondary sources that include; financial reports, periodicals, interview broadcasts, recorded audio-visuals, academic articles, and other relevant material that reviews fiscal oil regimes globally. The data will be analyzed using econometric models for optimization of economic relationships, attesting taxation theories, as well as exploration and evaluation of implemented government policies on the organizational operation. A regression relationship on economic policies before the initiation, and during the operation of the project will be built to help determine its implications on project's expenditure and expected time frame. Here, the independent variable includes policies on aggregate consumption, investment, unemployment, inflation, trade balance while the dependent variables are; project managerial entities such as budget and allocated time. In the end, emerging information on the operation behavior of megaprojects determined with the nation's fiscal regime is eluded.
Karasalihovic-Sedlar, D., Barbier, G. and Brkic, V., 2017.Types of fiscal regime in hydrocarbon exploration and production. Rudarsko-Geolosko-NaftniZbornik, 32(1).
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