MERA

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Publications

Available via subscription
  • Financial Ethics Index (FEI) 2014 and Quality of Workforce Index (QWI) 2014 are now available.
  • Business Risk Reports (BRS) 2014-I is published on April 4, 2014. See which countries advanced and which slipped in rankings! 
  • FORELEND 2014-I is now available for purchase.
  • MERA is back! BERI S.A.'s MVP for oil and gas companies is available for purchase now.

 

The Mineral Extraction Risk Assessment (MERA) annual study is a forecast and report for 70-145 countries, 1997-2010, Present Year, +5 years, +10 years, +15 years. This multi-client study is conducted for The Japanese Oil, Gas, and Metals Corporation. The study provides comprehensive, reliable forecasts and risk ratings for those countries which are expected to show a rapid growth in oil, gas, and mineral extraction capacity.

BERI S.A. recognizes that risk assessment for petroleum companies must consider two factors unique to extractive operations:

First, the companies are increasingly forced to look for crude oil in high-risk locations. Each new exploration opportunity requires a decision about whether the specific contract terms and the probability of a major oil strike justify commitment or resources relative to the losses that could be incurred by a foreign company extracting a nonrenewable material.

Second, the time from signing a contract to the start of recovering crude oil on a commercial scale can last a decade. The subsequent years of production provide the necessary return on investment.

Consequently, risk assessment must cover a longer period than the time horizon for manufacturing.

A special measure of country risk that considers the two factors has been conceived for MERA. The sources of these ratings are a combination of BERI S.A. panel data and senior staff estimates.

Three risks are the bases for the Exploration and Development Subindex (E&D): (1) Contract, (2) Physical, and (3) Operations. E&D comprise 75% of the overall country assessment. The Financial Subindex, 25% of the overall assessment, rates the possibility of losing the invested capital. Nationalization implies compensation; confiscation indicates seizure with no compensation. This subindex allows for disputed and inadequate payment by the host country.


Weighting
1. Contract Risk: Continuity of Terms 25%
2. Physical Risk:

Personnel Injuries/Fatalities
10%
Damage to Facilities
15%
3. Operation Risk: BRS Composite Score* 25%
Exploration and Development Subindex 75%
4. Financial Risk:
Nationalization
10%
Confiscation
15%
Financial Subindex
25%

Overall Assessment
100%


Ratings Scale

0 – 34 Prohibitive Risk Exploration activity is not recommended. Jeopardy to investment and personnel is excessive regardless of oil potential.
35 – 49 High Risk Exploration activity is recommended only when oil potential is very high and contract risk is moderate.
50 – 69 Moderate Risk Exploration activity is generally recommended. The probability of interference with commercial development is minimal.
70 –100 Low Risk Exploration activity is recommended. Full commercial development is probable.


* The Business Risk Service (BRS) has a composite score composed of the Political Risk Index, the Operations Risk Index, and the Remittance and Repatriation Factor. In the MERA system the composite score is used as an assessment of the general legal framework and business operating climate.



Country List for MERA STUDY


Algeria
Angola
Argentina
Armenia
Australia
Austria
Azerbaijan
Bahrain
Bangladesh
Belgium
Bolivia
Botswana
Brazil
Bulgaria
Burundi
Cambodia
Cameroon
Canada
Central African Republic
Chad
Chile
China (P.R.C.)
Colombia
Congo, Democratic
   Republic of
Congo, Republic of
Costa Rica
Côte d'Ivoire
Croatia
Cuba
Cyprus
Czech Republic
Denmark
Dominican Republic
Ecuador
Egypt
El Salvador
Estonia
Ethiopia
Fiji
Finland
France
Gabon
Gambia, The
Georgia
Germany
Ghana
Greece
Guatemala
Guinea
Honduras
Hong Kong
Hungary
Iceland
India
Indonesia
Iran
Iraq
Ireland
Israel
Italy
Jamaica
Japan
Jordan
Kazakstan
Kenya
Korea (R.O.K.)
Kuwait
Kyrgyz Republic
Lao, People's
Democratic Republic
Latvia
Lebanon
Libya
Lithuania
Macedonia, FYR
Madagascar
Malawi
Malaysia
Mali
Maldives
Malta
Mauritania
Mauritius
Mexico
Moldova
Mongolia
Morocco
Mozambique
Myanmar
Namibia
Nepal
Netherlands
New Zealand
Nicaragua
Niger
Nigeria
Norway
Oman
Pakistan
Panama
Papua New Guinea
Paraguay
Peru
Philippines
Poland
Portugal
Qatar
Romania
Russia
Rwanda
Saudi Arabia
Senegal
Seychelles
Sierra Leone
Singapore
Slovak Republic
Slovenia
South Africa
Spain
Sri Lanka
Sudan
Suriname
Swaziland
Sweden
Switzerland
Syria
Taiwan (R.O.C.)
Tajikistan
Tanzania
Thailand
Trinidad & Tobago
Tunisia
Turkey
Turkmenistan
Uganda
Ukraine
United Arab Emirates
United Kingdom
United States
Uruguay
Uzbekistan
Venezuela
Vietnam
Yemen
Zambia
Zimbabwe