We are excited to announce that as of February 1, Wood Mackenzie is a portfolio company of Veritas Capital, a leading investor at the intersection of technology and government. Our focus remains on providing you with the best intelligence, analytics, data and tools to ensure you are making the best data-driven business decisions with confidence.
Optimise the outcomes of fiscal discussions and ensure the most appropriate terms are achieved for new opportunities. With our Fiscal Service, E&P companies, investors and governments can review existing terms and enhance their negotiating power by referencing our independent analysis.
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Improve your planning and negotiating power with instant fiscal insights
Assessing fiscal terms is complex and can strongly influence investment outcomes. You need precise data to achieve the most competitive terms that deliver maximum returns.
Fiscal Service improves your planning and negotiating power with the most credible, verifiable and trustworthy analysis and modelling of global fiscal terms. The service provides instant fiscal insights and tools that enable you to stay informed on the latest trends, evaluate licensing rounds, benchmark global fiscal systems, and assess fiscal competitiveness.
Features at a glance
Inform your decisions and determine your negotiation strategy with our Fiscal Service, which provides benchmarking capabilities for over 150 fiscal regimes. Based on rigorous research by our team of fiscal experts, the service delivers our objective third-party view to make it easier to navigate the terms agreement process.
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Fiscal summaries for 150+ countries
Fiscal Benchmarking Tool to compare post-tax economics
Upstream Competitiveness Index identifies countries offering the best fiscal terms relative to their exploration potential and informs upstream investment decisions
Global fiscal terms database with each country's latest exploration terms and fiscal changes over time
Global coverage of latest fiscal changes, biddable terms and ongoing discussion
Insights into fiscal and licensing rounds
Analysis of fiscal changes from our team of 200+ global upstream analysts and petroleum economists
Key insights delivered throughout the year to inform and streamline your negotiations
fiscal regime summaries
fiscal and licensing reports per year
field economics per fiscal system
upstream analysts on hand for support
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Identify fiscal challenges under different investment opportunities
Screen and benchmark fiscal terms across global regimes
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Strengthen negotiation positions around the appropriate fiscal terms for new investment opportunities
Compare the economic impact and attractiveness of a country's fiscal system against other nations competing for investment
Brazil's upstream industry is primarily licensed with a complex concession fiscal regime. From October 2013, profit sharing contracts (PSC) are used for pre-salt developments and other strategic areas. Licences are awarded in regular rounds. Concession terms primarily include a 10% royalty, special participation tax that varies with time, location and production between 10% and 40%, and a 34% corporate income tax. PSC terms mainly include a 15% royalty, 80% cost recovery ceiling, and a biddable government profit share. The latter is adjusted based on a price and production combination. Corporate income tax applies similar to concessions. A key issue in Brazil is the complex range of indirect taxes in both regimes at the federal, state and local levels. These taxes add approximately 15% to 20% to project investments and costs.
When producing licences expire: should governments stick or twist?
Investors in conventional upstream projects are focusing their attention on the lowest risk, fastest return opportunities. And at the top of this list is incremental investment in existing assets. Increasing the ultimate recovery of a producing field by a few percentage points, using existing facilities, is hard to beat for low cost and high return investment. Some of this potential investment is being hindered, because the licences containing the assets are close to expiring. In some countries, producers are automatically allowed to continue producing an asset beyond the initial licence period. But in others, there is no guarantee that the investor will keep the current licence terms or even retain rights to production beyond expiry. Find out how expiries of producing licences can impact investors and projects in different countries.
This report contains:
When producing licences expire - should governments stick or twist.pdf
Companies are preserving capital and high grading opportunities as they work to reduce breakevens on new projects. Only the lowest cost and highest return investments will get the green light in this environment. But generating profits at current prices is not simply down to a company's ability to control costs. Governments have a role to play too. With capital scarce, the level and timing of the government's share of revenue comes to the fore. Terms must be competitive if the government is to have any success in attracting new investment. As a result, governments around the world are reviewing their fiscal terms and they have some big decisions to make. How do we remain 'competitive', while retaining a 'fair share'? Do we target the fiscal system on revenues or profits? Do we fix the fiscal terms to allow companies to bid them? How do we assure investors that terms will remain stable in the future? We consider each of these issues in this Thought Leadership report.