PEPS - Business Environment - Political Risk
Would you benefit from the expertise of highly qualified political analysts who can provide country activity from an oil and gas perspective?
The PEPS Political Risk module identifies, analyses and most importantly quantifies the political and commercial risks affecting exploration and production in over 120 countries.
Unlike more general country risk services, the PEPS political risk analysis is designed specifically for the international oil and gas industry, and is delivered from the unique perspective of the upstream oil business.
The analysis focuses on variables that directly influence the investment or operational decisions of upstream exploration plays and is divided between political risks, socioeconomic risks and commercial risks.
After analysis, countries are then ranked according to a “rate & weight” system based on a 11 political variables on a scale of 0 to 5 (with 5 the worst).
Political Risks
The analysis considers four familiar variables or indicators that typically form the basis of macro-level political risk assessment:
- War and external threats, including conflicts over issues of sovereignty and border disputes
- Civil and labour unrest, including strikes, protests and demonstrations against the government
- Internal violence, as evidenced by bombings, assassinations, kidnappings, low-intensity guerrilla warfare and crime
- Regime stability, based on the probability of a change in leadership through either a regularly scheduled election or unanticipated development such as a coup or death. The analysis focuses on variables that directly influence the investment or operational climates of upstream exploration plays and is divided between political risks, socioeconomic risks and commercial risks
Socioeconomic Risks
The analysis considers four social and economic factors that can adversely affect a host country's investment climate:
- Economic stability, based on the performance, liquidity and structural soundness of a country's economy
- Energy vulnerability, based on energy supply and demand, dependence on imported oil and the oil import bill as a percentage of total exports
- Environmental activism, based on level of activity and opposition to oil exploration by the environmental lobby
- Ethno-linguistic factionalism, based on level of unrest and threat to industry posed by tensions between rival ethnic, religious or linguistic groups
Commercial Petroleum Risks
The analysis identifies and considers certain risks that are neither strictly political nor economic in origin, but nevertheless pose operational constraints:
- Level of opposition to foreign energy sector investment by interest groups or public officials
- Restrictions on the repatriation of capital and revenues, and restrictions on currency convertibility
- Threat of adverse changes in contractual or fiscal terms
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The PEPS Political Risk module identifies analyses and most importantly quantifies the political and commercial risks affecting the exploration and production logistics in more than 120 countries. |
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The PEPS political Risk Ranking module takes the editorial information from the Political Risk module, rates the 11 political risk variables on a scale of 0 to 5 (with 0 the best), weights them and compiles a total average weighted rating which is then ranked. |