There are countless petroleum and mineral fiscal systems throughout the
world. This is because many petroleum and mineral producing countries
have developed their own methods of calculating government take
through fiscal evolution or individual negotiation. Those countries fortunate enough to have petroleum and mineral
reserves within their national boundaries are naturally reluctant to yield
this resource without a reasonable return for their population. As resource
companies are perceived to be enormous conglomerates with endless
amounts of cash and resources, governments and the general public
demand reasonable division of production while these finite resources
last. On the other hand, because companies engaged in the exploration
for, and production of, minerals, oil and gas have to be large or lucky
(preferably both) to sustain the great physical and commercial risks
involved, the income and profit figures look so large that the general
public sees them as an acceptable target for taxation. Taxation of the resource industry has been one of the industry's
greatest cash flow problems through the years. Allen and Seba (1993)
attribute this to the fact that the most equitable tax systems are those that
affect the widest possible total of the population.