Lower oil price forces tax regime changes

The effective oil price ceiling created by the US shale boom is causing governments elsewhere to revise their tax codes

The shock of the dramatic fall in the oil price since 2014 has been reverberating ever since. But now there is a grudging acceptance that US shale oil could limit the price of WTI to a $55-65/bl band for a prolonged period, leading governments to permanently reform tax codes. Governments have a particularly tricky task if oil and gas revenue is the primary source of income. A balance must be struck between the conflicting demands of competing for international investment capital and collecting tax revenues. "Some countries have reduced the tax burden to try to maintain investment," says Derek Leith, global oil & gas tax leader at financial services firm EY, and contributor to its Oil and