Brazil produces around 2.4 million barrels of oil per day and requires oil companies doing business in its country to pay around 50% of their profits to the government in royalties or corporate taxes. However, a new discovery off of the country's coast containing 50 billion barrels of oil and natural gas could see this number rise to around 80%. Both Brazil and Nigeria were known for offering fairly good contracts to oil giants that operate within their borders. Nigeria is also considering increasing its royalty rate and will require materials used in construction projects to be locally made in order to help out local material providers. It also wants its state oil firm to have a bigger role in projects.Partnering with state-owned companies in oil-rich nations could help increase oil production and give them more access to better oil deposits.
Friday, March 5, 2010
Oil-rich countries demand a bigger cut of profits
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Oil prices would rise and oil rich countries may take advantage of this as it is a good source of income. However for countries such as Nigeria the high prices may help local workers who live in poverty.
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