Markets largely dictate how the relationship between international oil companies and host states will play out, with governments attempting to ensure they receive a ‘fair share’ of petroleum revenues. But with no clear definition of what a fair share is, particularly in relation to changes in oil prices, the perception of a fair share remains under near constant review. This results in a pendulum effect, whereby changing market conditions can place either governments or companies in more advantageous positions in negotiations.
This brief unpacks this concept by first reviewing changes in government policy vis-à-vis buy accutane generic changes in the oil market. It then explores the cycle with which states had discouraged private investment and then tried to entice oil companies to invest, depending on the oil price. It then discusses additional factors that should be taken into consideration along with the oil price. The brief concludes with the implications for a newcomer like Lebanon, specifically with respect to the country’s first licensing round and how the government should design its fiscal regime considering the current state of the oil market.