Insight
Economic impact of Nigeria's proposed fiscal changes
Report summary
Wood Mackenzie has quantified the impact of the Petroleum Industry Bill that was put before the National Assembly in July 2012. Using the proposed upstream fiscal changes detailed in the PIB, and proposed royalties that are separate to the PIB, our analysis indicates the following: For small E&P players in Nigeria, the proposed changes are a positive step. The availability of production allowances would provide a welcome boost for them, and profitability increases under the proposed,
What's included
This report contains
Table of contents
- Executive Summary
- Introduction
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Onshore and Shallow Water Concessions
- JV Oil
- Non-JV Onshore Oil
- Gas Sector
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What about the deepwater sector?
- Producing PSCs and PSAs
- Undeveloped deepwater projects
- Impact of the changes on deepwater corporate value
- Impact of the PIB on deepwater investments and production
- Impact of the PIB on deepwater Government share
- Impact on Government free cash flow from the deepwater sector
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Economic Modelling
- Assumptions & Definitions
- Model Field Assumptions
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Fiscal changes proposed in the PIB
- Nigerian Hydrocarbon Tax
- Companies Income Tax
- Production allowances
- Petroleum Host Communities Fund (PHCF)
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Fiscal changes outwith the PIB
- Royalties
- Production Sharing Contracts (PSCs)
Tables and charts
This report includes 23 images and tables including:
Images
- Comparison of NPV10 and IRR for a 300 bcf onshore dry gas field across selected regimes
- NPV10 of model onshore gas fields in a JV with NNPC
- NPV10 of model shallow water gas fields in a JV with NNPC
- Gov. Share in a new onshore JV gas field
- PIB impact on RemPV10 of deepwater players using a 15% hurdle rate for new projects*
- PIB Impact on deepwater investments and liquids production using a 15% hurdle rate for new projects
- Rem. Gov. Share in producing deepwater fields
- Gov. Share in undeveloped deepwater fields
- International comparison of Government Share (NPV10) under deepwater fiscal regimes*
- Government free cash flow from deepwater, excluding future projects with IRR <15%
- PIB impact on a new onshore field in a JV
- PIB impact on a new shallow water field in a JV
- Gov. Share in a new onshore JV oil field
- Gov. Share in a new shallow water JV oil field
- PIB impact on new onshore fields not in a JV with NNPC
- PIB Impact on remaining value of producing deepwater PSCs & PSAs
- Indicative impact on NPV10 of undeveloped deepwater projects
- Indicative impact on rates of return for undeveloped deepwater projects*
- Proposed royalty rates for oil
- Proposed royalty rates for gas
Tables
- Deepwater projects sanctioned in Sub-Sahara Africa in the last five years
- Economic impact of Nigeria's proposed fiscal changes: Table 2
- Summary of profits-based tax changes
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