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Bangladesh upstream fiscal summary

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09 November 2018

Bangladesh upstream fiscal summary

Report summary

All licences in Bangladesh are governed by production sharing contracts (PSCs) of several vintages. We base our analysis on the most recent 2012 Model PSC terms. Contracts are awarded through licensing rounds and direct negotiations. National oil company, Petrobangla, does not have mandatory interests in the blocks. Cost recovery ceilings ranging from 55% to 70% and production bonuses up to US$6 million are set in the PSC. Various fees, corporate income tax of 25% for companies listed on Bangladesh exchange and 35% for non-listed companies are also payable. Bonuses, profit splits based on production rates (indicatively from 20% to 55% for the contractor) and domestic supply obligation (up to 80% of contractor's profit oil) are negotiable. For deepwater areas a higher cost recovery ceiling is applicable, and Petrobangla pays income tax on behalf of the contractor.

Table of contents

  • Executive summary
    • Basis
    • Licence terms
    • Government equity participation
    • Fiscal terms
      • Ring fencing
      • Bonuses, rentals and fees
        • Bonuses, rentals and fees
      • Indirect taxes
      • Royalty
      • PSC cost recovery
      • PSC profit sharing
      • Additional petroleum taxes
        • Domestic supply obligation
      • Corporate income tax
      • Fiscal treatment of decommissioning
      • 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
      • Effective royalty rate and minimum state share - deepwater, gas
    • Progressivity
    • Fiscal deterrence

Tables and charts

This report includes 25 images and tables including:

  • Revenue flowchart: Bangladesh PSC
  • Timeline
  • Timeline detail
  • Split of the barrel - oil
  • Split of the barrel - gas
  • Share of profit - oil
  • Share of profit - gas
  • Effective royalty rate and minimum state share - onshore/shelf, oil
  • Economic analysis: Table 2
  • Effective royalty rate and minimum state share - deepwater, oil
  • 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
  • Indirect taxes
  • Contractor profit share - oil and gas
  • Contractor profit share - oil
  • Contractor profit share - gas
  • Assumed terms by location - oil and gas
  • Economic analysis: Table 4
  • Maximum government share and maximum state share - onshore/shelf, oil
  • Maximum government share and maximum state share - onshore/shelf, gas
  • Maximum government share and maximum state share - deepwater, oil
  • Maximum government share and maximum state share - deepwater, gas
  • Current licence, equity and fiscal terms: Table 1

What's included

This report contains:

  • Document

    Bangladesh upstream fiscal summary

    PDF 816.05 KB

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