Economic impact of Nigeria's proposed fiscal changes Report

Insight 03 April 2013

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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below

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,

Executive Summary
Introduction
Onshore and Shallow Water Concessions
- JV Oil
- Non-JV Onshore Oil
Gas Sector
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
Economic Modelling
- Assumptions & Definitions
- Model Field Assumptions
Fiscal changes proposed in the PIB
- Nigerian Hydrocarbon Tax
- Companies Income Tax
- Production allowances
- Petroleum Host Communities Fund (PHCF)
Fiscal changes outwith the PIB
- Royalties
- Production Sharing Contracts (PSCs)

Tables and charts

This report includes the following images and tables:

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
Deepwater projects sanctioned in Sub-Sahara Africa in the last five years
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
11 more item(s)...