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Accounting for Depletion of Oil and Gas Resources in Malaysia

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  • Othman, Jamal
  • Jafari, Yaghoob

Abstract

This paper provides an assessment of the changes in the availability of oil and gas resources in Malaysia. The physical and monetary balance sheets for crude oil and natural gas for the period 2000- 2007 was constructed. The net present value of expected future incomes to reflect the value of resource change was calculated based on a physical extraction and a resource rent scenario. Resource rent is gross operating surplus less the estimated user cost of produced capital in the crude oil and natural gas extraction industry. We obtained the gross operating surplus by subtracting the value of consumption of employees and net taxes on production cost from the value added of petroleum domestic products. Our findings noted serious reduction of oil reserves from 2001 – 2005, due to changes in crude oil prices, and thereafter the depletion rate decreased. Malaysia has depleted her natural gas reserves mainly in 2004 and 2005. Changes in reserves values were attributable more to price changes and new discoveries. Further, our study shows the royalty rate paid by the state oil company was far less than the estimated resource rent.

Suggested Citation

  • Othman, Jamal & Jafari, Yaghoob, 2011. "Accounting for Depletion of Oil and Gas Resources in Malaysia," MPRA Paper 29037, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:29037
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    References listed on IDEAS

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    1. Vincent, Jeffrey R., 1997. "Resource depletion and economic sustainability in Malaysia," Environment and Development Economics, Cambridge University Press, vol. 2(1), pages 19-37, February.
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    Cited by:

    1. Tarek Tawfik Yousef Alkhateeb & Haider Mahmood, 2020. "Oil Price and Energy Depletion Nexus in GCC Countries: Asymmetry Analyses," Energies, MDPI, vol. 13(12), pages 1-13, June.

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    More about this item

    Keywords

    Sustainability; Environmental Accounts and Accounting; Malaysian Oil and Gas Depletion;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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