Task 1: (10 Marks) Problem: Compare the impact of different oil prices on the governments' NPV for UAE, Nigeria & Oman.
Posted: Thu May 26, 2022 8:00 am
- Task 1 10 Marks Problem Compare The Impact Of Different Oil Prices On The Governments Npv For Uae Nigeria Oman 1 (102.07 KiB) Viewed 14 times
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Task 1: (10 Marks) Problem: Compare the impact of different oil prices on the governments' NPV for UAE, Nigeria & Oman. The cost per Barrel ($/bbl) for oil extraction in these countries are assumed to be $10, $20 and $15 respectively. You may choose to take OPEC data as your main reference for oil production rates during the five-year interval between Jan. 2012- Jan. 2017. Consider the following oil price per bbl as three different scenarios: 1. $30/bbl 2. $65/bbl 3. $100/bbl a) For each of the above oil selling prices, calculate the Net Present Value of the oil export during the five-year period for each of the countries. [4.5 Marks] b) Based on the oil extraction cost/barrel for each country, calculate the selling price of oil per barrel so that a net profit margin of 15% is achieved for each of the countries of interest. [4.5 Marks] c) How much is the additional NPV generated for UAE during the mentioned time interval if the oil selling price was $75/bbl instead of $65/bbl (that is, a $10 increase in selling price per barrel)? [1 mark] Note: All your answers must be supported by detailed calculations. The refences for all the datasets or any other utilized information need to be listed in your work.