Country Report

Azerbaijan upstream fiscal summary

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07 June 2019

Azerbaijan upstream fiscal summary

Report summary

Historically foreign companies operated in Azerbaijan under either a Joint Venture (JV) or a Production Sharing Contract (PSC). However, with the award and ratification of the first onshore PSC (Southwest Gobustan in November 1998) JV agreements in Azerbaijan became effectively obsolete and future awards will be under PSC terms. PSC terms are relatively straightforward, with bonuses payable, no royalty, fixed cost recovery, and profit oil splits based on a sliding scale ‘R Factor'...

Table of contents

  • Basis
  • Licence terms
  • Governmentequity participation
    • Bonuses, rentals and fees
    • Indirect taxes
    • Royalty
    • PSC production sharing
    • Ring fencing
    • PSC cost recovery
    • Rate (cost recovery ceiling)
    • Unrecovered costs
    • Excess cost recovery
    • PSC profit sharing
    • Rate
    • Payment schedule
    • Corporate income tax
    • Fiscal treatment of decommissioning costs
    • Product pricing
    • Summary of modelled terms
  • Recent history of fiscal changes
  • Stability provisions
  • Split of the barrel and share of profit
  • Effective royalty rate and maximum government share
  • Progressivity
  • Fiscal deterrence

Tables and charts

This report includes 20 images and tables including:

  • Timeline
  • Timeline detail
  • Split of the barrel - oil
  • Split of the barrel - gas
  • Share of profit - oil
  • Share of profit - gas
  • Effective royalty rate - onshore , oil and gas
  • Effective royalty rate - shelf/deepwater , oil and gas
  • Maximum government share – onshore, oil and gas
  • Maximum government share – shelf/deepwater, oil and gas
  • State share versus pre-share IRR - oil
  • State share versus pre-share IRR - gas
  • Investor IRR versus pre-share IRR - oil
  • Investor IRR versus pre-share IRR - gas
  • Bonuses, rentals and fees
  • Indirect taxes
  • Capital cost recovery ceiling, offshore
  • Profit share ratios for onshore
  • Profit share ratios for shelf/deepwater
  • Assumed terms by location - oil and gas

What's included

This report contains:

  • Document

    Azerbaijan upstream fiscal summary

    PDF 904.07 KB

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