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The economic impact of petroleum royalty reform on Turkey's upstream oil and gas industry

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  • Aydın, Levent

Abstract

The aim of this paper is to examine the economic impact of the royalty reform. The draft Turkish petroleum Law introduces two important fiscal changes to increase to increase domestic petroleum production, further national petroleum supply, attract investors and harmonize its laws with those of the European Community: (1) progressive sliding royalty relief on oil and gas production leases and (2) 50% of the royalty shall be transferred to province where the production lease exists.Results included in this analysis indicate that there would be 2% increase in oil production thanks to 128 oil fields extending economic life and 0.5% increase in gas production thanks to 63 gas fields due to their profitability in the forecasted period. Half of royalty is transferred to low per capita income provinces and tends to contribute distribution of income. However, half of gas royalty is transferred to high income per capita provinces.

Suggested Citation

  • Aydın, Levent, 2012. "The economic impact of petroleum royalty reform on Turkey's upstream oil and gas industry," Energy Policy, Elsevier, vol. 43(C), pages 166-172.
    • Handle: RePEc:eee:enepol:v:43:y:2012:i:c:p:166-172
    DOI: 10.1016/j.enpol.2011.12.048
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    References listed on IDEAS

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    1. Brandt, Adam R., 2007. "Testing Hubbert," Energy Policy, Elsevier, vol. 35(5), pages 3074-3088, May.
    2. Dismukes, David E. & Burke, Jeffrey M. & Mesyanzhinov, Dmitry V., 2006. "Estimating the impact of royalty relief on oil and gas production on marginal state leases in the US," Energy Policy, Elsevier, vol. 34(12), pages 1389-1398, August.
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    Cited by:

    1. Irena Macherinskiene & Inna Kremer Matyskevich, 2017. "Assessment of Lithuanian Energy Sector Influence on GDP," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 13(4), pages 43-59.

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    Keywords

    Upstreamn; Oil; Royalty;
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