Saudis Quietly Raised Aramco Royalties With Switch to Brent Oil - Bloomberg:
Saudi Arabia quietly raised taxation on Aramco by switching the oil benchmark used to calculate royalties, from the actual value of the kingdom’s crude to the more expensive benchmark Brent.
The switch, made in 2017 but revealed this week in the prospectus for Saudi Arabian Oil Co.’s first ever international bond, shows how the kingdom is squeezing its oil company for money even after lowering other taxes. The change could add nearly 7 percent to the price used to determine the royalty, according to Bloomberg News calculations based on the prospectus. It also exposes Aramco to a significant new risk, related to the price difference between Saudi crude and Brent, which over the past decade has been extremely volatile.
Aramco declined to comment on the switch. The company said the most significant change to its fiscal regime was publicly announced in 2017, when its income tax was lowered to 50 percent from 85 percent.
No comments:
Post a Comment