Browsing by Author "Mchaki, Oscar Anael"

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    Assessing the influence of production sharing agreement on effectiveness of fiscal regimes management of oil and gas in east Africa: the case of Tanzania Kenya and Uganda
    (University of Dar es Salaam, 2017) Mchaki, Oscar Anael
    The discoveries of a significant amount ofjioil and gas in East Africa have drawn attention to their oil and gas fiscal regime. Oil and gas extraction is an attractive source of revenue for many governments in the world. The sharing of profits under East Africa petroleum fiscal systems has been relied on barrels of oil produced per day (BOPD) for all three East Africa countries. In oil and gas contracts the host government enters into the PSA for two main objectives which are; to obtain the maximum revenue from oil and gas activity and secondly to attract the foreign IOC investment. Using a quantitative approach, this study aims to determine which among the current East Africa countries (Tanzania, Kenya and Uganda) fiscal system facilitates the attainment of the those two objectives. The scenario analysis used to test the East African fiscal systems based on current MPSA terms, these regimes was tested through financial tool such as IRR, NPV, R-factor and Non-discounted cash flow techniques. The conclusion establishes that the, East African Fiscal regimes are not well structured to attain these contradicting government objectives. Evidently East African governments will not take the Fair share of oil and gas return especially when the profit is high and also fiscal system attractiveness is doubtful because the oil company will fail to cope with significant change in oil price and operating cost using the current BOPD system. The study recommends that in order for East Africa countries to achieve their objective shall foregone or use together the BOPD system with R-factor which link aspects of the profit-sharing mechanism to profitability of investment.