4.1.2. Host Government Take (GT)

Government take (GT) is the fundamental indicator of this study because other indicators are calculated based on the results of GT. Hence, GT is calculated in various ways used in the petroleum industry. As discussed in the literature review, GT puts the impacts of several fiscal regimes into one indicator. GT is defined as the proportion of the host nation's income to the total project revenue within the valid period of the contract. According to Bindemann (1999), the equation of GT is

$$\text{GCT} = \text{(NCF(Gov))} / \text{(NCF(Gov) + NCF(IOC))} \times 100\% \tag{1}$$

where, NCF (Gov) is the net cash flow of the host governmen<sup>t</sup> and NCF (IOC) is that of the international oil company.

The interpretation of GT indicator relating to the attractiveness of fiscal regime is that "the larger GT is, the less attractive the fiscal regimes of the contract is to the IOC". In this research, GT is calculated in two ways; the first way is the fast and intuitive method and the second is the non-discounted cash flow model (NDCF).
