Upstream licences in Lebanon are awarded through licensing rounds under production sharing contract (PSC) terms, which are called exploration and production agreements (EPAs). Within the PSC regime, cost recovery ceiling and contractor profit share are biddable parameters. Profit sharing is linked to a R factor metric. A production-based royalty varying from 5% to 12% is levied on liquids revenue and a flat royalty of 4% is levied on gas revenue. Corporate income tax is levied at 20%. There is no mandatory state participation as per the EPA, however the state has an option to take a share in the license based on the opinion of the Petroleum Administration. The EPA mandates that there must be at least three signatories to the contract.