4.1.4. Front Loading Index (FLI)

The definition of FLI by Luo and Yan (2010) is the ratio of the difference between non-discounted GT and the discounted GTi to GT. FLI can be calculated as

$$\text{FLI} = (\text{GT} - \text{GTi}) / (\text{GT}) \times 100\% \tag{18}$$

Luo and Yan's interpretation of the FLI relating to attractiveness is that the smaller the FLI, the less risk the IOC will face in the earlier stage of the project life. Consequently, the lower the risk of the earlier phase, the more attractive the petroleum fiscal regimes used in the E&P project.
