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Azerbaijan upstream fiscal summary

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04 July 2018

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

  • Executive summary
    • Basis
    • Licence terms
    • Government equity participation
    • Fiscal terms
      • Ring fencing
      • Bonuses, rentals and fees
      • Indirect taxes
      • Royalty
      • PSC cost recovery
      • PSC profit sharing
      • 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
    • Investor IRR versus pre-share IRR - oil

Tables and charts

This report includes 22 images and tables including:

  • Revenue flowchart: Azerbaijan PSC
  • Timeline
  • Timeline detail
  • Split of the barrel - oil
  • Economic analysis: Image 2
  • Economic analysis: Image 3
  • Economic analysis: Image 4
  • 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
  • Economic analysis: Image 7
  • Investor IRR versus pre-share IRR - gas
  • Bonuses, rentals and fees
  • Indirect taxes
  • Current licence, equity and fiscal terms: Image 1
  • Current licence, equity and fiscal terms: Table 3
  • Profit share ratios for shelf/deepwater
  • 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 286.22 KB

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