Iraq upstream fiscal summary Report

Country Report 07 June 2023

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Report summary

Upstream licences in Federal Iraq are awarded through licensing rounds under Service Contracts terms. These terms have features of both a service contract and a production sharing contract (PSC) and hence are referred to as a Hybrid Service Contract. The last Hybrid Service Contract was awarded in May 2018. The hybrid service contract terms comprise of a royalty, cost fee, remuneration fee and income tax. Remuneration fee is the only biddable parameter and is a percentage of net revenue share. Royalty is levied at 25%, cost fee ceiling varies by oil price from 30% to 70%. Corporate income tax is levied at 35%.

Basis
Licence terms
Government equity participation
Fiscal terms
- Bonuses, rentals and fees
- Indirect taxes
- Royalty
- Ring fencing
- Base
- Rate
- Service fee
- Ring fencing
- Cost fee
- Base
- Rate (cost fee ceiling)
- Recoverable costs
- Unrecovered costs
- Remuneration fee
- Base
- Rate (remuneration fee)
- Payment schedule
- 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
Progressivity
Fiscal deterrence