Customer Reviews

International Petroleum Fiscal Systems and Production Sharing Contracts

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This book is an excellent practical tool to gain understanding on how the Production Sharing Contracts/ Agreements of the international oil industry work and how the negotiations on PSA normally flow. Johnston does not concentrate on cultural aspects of a particular country, but rather on the mechanics of the PSA and its major issues. The topics that Johnston covers are "Petroleum Fiscal Systems," "Concessionary Systems," "Production Sharing Contracts," "Risk Service Contracts," "Threshold Field Size Analysis," "Global Market for Exploration Acreage," "Production Sharing Contract Outline" "Accounting Principles," and "Double Taxation." This introductory comprehensive overview of PSA concepts is written in a clear and understandable manner so that even a person without a background in accounting, taxation, and oil engineering is able to understand the author's explanations and conclusions. This source will be most helpful to consult if one is interested in learning or simply clarifying the concepts of exploration economics, oil taxation, contract/fiscal terms, and PSA negotiations in the international context.

I first read this book in 1996 and consider it to be the most useful book I have ever read on the oil industry. If you want to understand the basics of resource economics, risk sharing and rent sharing (taxes vs profits), no book will serve you better.
Don't be put off by the fact that the book was published in 1994 (and as far as I can tell, has not been updated since). This is a book about core principcles that works as well in a $100/bbl as a $10/bbl world.