Asymmetry and uncertainty in capital formation: An application to oil investment

,Oil; Investment

Multinationals, tax competition, and outside options

.Tax competition; mobility; common agency; countervailing incentives

CCS from the gas-fired power station at Kårstø A commercial analysis

.Carbon Capture;

Disposal of Petroleum Installations - Major Policy Issues

Following the Brent Spar controversy, the OSPAR countries reached a unanimous agreement in 1998 for the future rules for disposal of petroleum installations. The vast majority of existing offshore installations will be re-used or returned to shore for recycling or disposal. For installations where there is no generic solution, one should take a case-by-case approach. We provide a survey of international economic and regulatory issues pertaining to disposal of petroleum installations, and provide specific examples by analysing the Norwegian decommissioning and disposal policy. Optimal disposal policy can be analysed by cost-benefit analyses with distributional effects, subject to environmental and goodwill constraints.Petroleum installations, decommissioning, disposal, externalities

Strategic Tax Competition; Implications of National Ownership

Two jurisdictions compete to capture the rents of a large multinational enterprise (MNE) which invests locally and which is partly owned by local investors. The MNE contributes to local welfare by tax payments and dividends, and it has private information about the efficiency of the operations in the two localisations. It is shown that the distortions in the MNE's real investment portfolio are determined by a trade-off between fiscal externalities and equity externalities, and that investments in the case of strategic tax competition may be lower than in the co-operative case. Ownership matters, and we show how the firm may reduce its overall tax payments by influencing the distribution of owner shares between investors in the two countries.Tax competition, mobility, common agency

Petroleum Taxation: Experience and Issues

,Oil; Taxation

Improved recovery from existing fields. A survey of decision criteria

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Multinationals, tax competition and outside options

We analyse tax competition when a multinational firm has invested in two countries but also has an outside option, e.g., towards a third country. An interesting finding is that more attractive outside options for firms may constitute a win-win situation; the firm as well as its present host countries may gain when this occurs. The reason that it benefits the host countries is that an enhanced outside option reduces the inefficiencies of tax competition. An implication of the result is that better outside options for multinational firms may reduce the gains from host countries’ policy coordination and thus reduce those countries’incentives to coordinate their policies. Also, with a development where outside options become more accessible, the perceived costs of tax competition, e.g., in terms of underprovision of public goods, may be overestimated. Our findings may also have implications for international negotiations, since it provides an argument for mutual reduction of entry barriers, as this may improve outside options.Tax competition; mobility; common agency; countervailing incentives

Energy Taxes and Natural Gas Demand in EU-Countries

Producers or consumers faced with an increase in taxes are usually able to shift parts of it to other levels in the value chain. We examine who is actually bearing the burden of increased energy taxes in the EU-area - consumers or exporters. Traditional tax incidence theory presumes spot markets. Natural gas in the EU-area, however, is to a large extent regulated by incomplete long-term contracts. Still, spot market forces could be indicative for tax shifting, by determining the ex post bargaining power in contract renegotiations. By examining tax shifting in actual gas sales contracts we test whether this is the case. To calculate tax incidence we derive demand elasticities, income elasticities and cross price elasticities for natural gas, oil and electricity, for different market segments (households, industry, power generators) in EU countries. Particular focus is on tax incidence in gas markets regulated by incomplete long-term contracts. Based on our findings we discuss normative energy tax issues related to revenue, environmental obligations and security of supply.Energy Markets, incomplete contracts, tax incidence