How Governments Manage Their Offshore Petroleum Resources
Chapter 5: Resource rent, value and stewardship
The chapter examines how states seek to recover value when they allocate rights to companies and how this relates to their stewardship obligations. It examines resource rent and how the fiscal systems of Australia, Norway and the UK capture a share. It compares how companies perceive value. The chapter explores the meaning of stewardship for both companies and states. One of the prime motivations for companies is the legal obligation of directors to manage the company for the benefit of shareholders, which leads to a corporate focus on maximising profits. This is supported by corporate culture. In comparison the stewardship obligations of states are generally less defined and do not link recovery of value with ensuring operations are conducted to an appropriate standard. State stewardship depends on the objectives set for the resource management system – which the book suggests should be based on the licensing and production of petroleum being the disposal of a national asset and require a comprehensive governance system. The chapter then examines how MERUKS has developed ideas of state stewardship in the UK.
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