Introduction
Over several immediately preceding columns I have undertaken a basic stock taking of Guyana’s petroleum sector in three of its dimensions. First, published estimates of its Government Take ratio [that is, share of oil companies net revenue flows] or in fiscal terms the Average Effective Tax Rate, AETR, levied on oil investors. Second, similar estimates of recoverable petroleum resources; and third, similar estimations of what I term as the “shelf life” of prevailing carbon emitting crude oil global trading. Consequent to this the declared upfront purpose behind this undertaking is to evaluate the consequential unfolding situation after the Government’s planned public auctions take effect.
The column’s title goes to the heart of the matter through invoking several basic queries. Thus, for example, what are the intended benefits from the proposed public auctions? Further, based on its several aims what weight is given by the Authorities to raising the AETR in the public auctions? What is the price elasticity of demand for exploration blocks in Guyana?