*6.1. Summary*

Based on the assessment of upstream petroleum fiscal regimes, the findings in CS will be useful to the IOCs when making decisions for overseas selection phase in fiscal terms. Cambodia, Indonesia, and Australia are the most attractive for international investors in terms of CS. The findings that Indonesia ranks below Cambodia conforms to the results of Putrohari et al. (2007) who stated that Indonesia PSC provides a better project value compared to other countries. This is because the Indonesian governmen<sup>t</sup> strives to maximize wealth through its natural resources by revising the fiscal terms over time, though Indonesia had the toughest fiscal regimes in the past.

<sup>16</sup> The attractiveness rank of U.S. in terms of FLI (Table 8).

<sup>17</sup> The smaller the FLI, the less risk the IOCs will face in the earlier stage, and the more attractive the contract fiscal terms are to the IOCs (Luo and Yan 2010).

<sup>18</sup> Scores and weightings should be determined using a technique such as Delphin or Peer review or a questionnaire (Henriksen and Traynor 1999).

From the result for FLI, the highest ranks belong to the countries practicing the PSC system such as Indonesia, Cambodia, and Vietnam. The lowest ranks belong to the countries adopting a concessionary system such as Canada, Australia, and Mozambique. This implies that PSC fiscal policy is more attractive than the concessionary policy. This supports previous finding from Kyari (2013) and Iledare (2004) where the PSC system was more favorable than other systems. Due to differences between PSC and concessionary, it is better to separately analyze the effects of each fiscal regime in the PSC system and those in a concessionary system.

The main findings of GT and GTi suggests that there are three main issues in this study. Firstly, royalty and tax affect the attractiveness rank of fiscal regimes in the evaluation of petroleum resource development projects, with or without consideration of the time value of money, especially for countries which use a concessionary policy. Secondly, in the PSC system, royalty and tax also affect the attractiveness rank of a fiscal regime, but only in an evaluation that considers the time value of money. Thirdly, cost recovery<sup>19</sup> affects the attractiveness of fiscal regimes in the evaluation of projects without consideration of the time value of money.

The findings about royalty and tax effect on upstream petroleum fiscal terms in this research are consistent with the previous results by Nakhle (2004) and Kyari (2013). Likewise, the findings about cost recovery effect on the fiscal regimes' attractiveness rank, the cost recovery rate in Myanmar also supports the concept that the low-cost recovery limit has a big impact (Johnston 2008).

Myanmar ranks sixth out of eight competing countries. With this low rank, it is not so attractive for investors, especially in comparison with regional countries such as Indonesia, Cambodia, and Vietnam. Disregarding the U.S., Australia, Mozambique, and Canada, which adopt a concessionary system, Myanmar is the least attractive country among those countries which practice a PSC policy in terms of both FLI and CS. In summary, the Myanmar upstream petroleum fiscal regime has a low attraction compared to its competing countries from the investor's point of view, both in terms of the risk to the investor in the earlier part of the project and in terms of evaluation with or without the time value of money.
