The petroleum fiscal regime of a country is a set of laws, regulations and agreements which governs the economical benefits derived from petroleum exploration and production. The regime regulates transactions between the political entity and the legal entities involved.[1] A commercial or legal entity in this context is commonly an oil company, and two or more companies may establish partnerships to share economic risks and investment capital.
Although petroleum, oil and gas, and hydrocarbons are not technically mineral resources, the term mineral rights is used to denote rights to exploit oil and gas resources from the underground. Onshore, in United States, the landowner possesses exclusive rights for mineral rights, elsewhere generally the state does.[1] For this reason, the fiscal regime of US is divergent from that of other countries. The petroleum licensing system of a country may be considered interwoven with the fiscal regime, however, a licensing system has its distinct function: to grant rights for petroleum exploration and production to commercial entities.
Because each country has distinctive legislation, there are theoretically just as many different fiscal regimes as there are countries in the world with petroleum resources, but the regimes can still be categorized based on their common characteristics.