Because of a long time frame, irreversible and specific investments, incomplete contracts and political constraints, it is generally difficult for governments to commit themselves in a credible way to a fixed petroleum tax regime. Many controversial renegotiations and tightenings of such systems...

Recently, we have seen falling oil prices combined with sticky costs at a high level in the petroleum industry. This causes project postponements, thus challenging reserve replacement of oil companies and security of supply for consumers. Costs are particularly high for drilling. High rig rates...

Shortages of rigs and personnel have encouraged creativity in designing incentive contracts in the drilling sector. In particular for oil service contracts, since those companies have the most direct control of drilling efficiency. A large variety of contract types are in use, including within...