| Summary: | This thesis presents an analysis of the development and future prospects for the Russian oil industry (1860-2012). The objective of this study is to develop a 'supply forecasting' methodology that is sufficiently flexible to model and explain the historical evolution of the Russian oil industry-despite the diverse nature of the economic and political regimes that have governed its development-and to produce a reliable forecast for the future development of the industry under a variety of assumptions regarding the fiscal environment that might be expected to prevail in the future. The Russian Federation crude oil supply curve, and 'fiscal and pricing' model is a variation of the rate of effort approach developed by A.D. Zapp (1962). The rate of effort curve is based on the existence of an 'objective' empirical relationship between drilling activity and discoveries, so that the model is insensitive to political and economic influences. The exogenous driving variable-the number of wildcats-may be determined by central command, the specifications of multi-lateral lending agencies, the level of investment funds devoted to the exploration effort, and/or the principles of perfect competition. A time series representing the evolution of exploration effort and cumulative discoveries for the entire history of the Russian oil industry (1860-1998) is used in the estimation of the parameters. The main contribution of this study is the use of the Russian Federation crude oil supply curve and 'fiscal and pricing' model to assess the evolution of the regulatory and fiscal (tax) regime governing petroleum operations in the Russian Federation. In the years 1991-1997, the development of the Russian oil industry has been repressed by an inefficient, revenue-based tax system. Given the potential for profits-economic rents-in the Russian oil industry, an infinite number of petroleum rent schemes may be devised for the collection and distribution of these rents. The interests of the Russian Federation will be best served by the development of a tax regime that promotes self-sufficiency in the upstream petroleum industry.
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