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Energy Economics
Article Title: A model of the operation and development of a national oil company
Specialization Codes: 1.7 - Policy and Regulation, 2.7 - Policy and Regulation,
Authors: Peter R Hartley, Kenneth B. Medlock III
Publication Date: 2008
Description: We present a model of the exploration and development activities of a National Oil Company (NOC), which 10 uses similar technology to a private firm to extract a depletable resource. However, unlike the private firm, the NOC 11 may have a wider range of objectives than maximizing the present value of profits. Specifically, we assume an 12 objective function that balances firm profitability against a political desire to favor domestic consumer surplus and 13 domestic employment. We find that the non-commercial objectives faced by a NOC tend to reinforce each other in 14 their effects on profitability, the timing of cash flows and employment.

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