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Lebanon upstream fiscal summary

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20 September 2018

Lebanon upstream fiscal summary

Report summary

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.

Table of contents

  • Executive summary
    • Basis
    • Licence terms
    • Government equity participation
    • Fiscal terms
      • Ring Fencing
      • Bonuses, rentals and fees
      • Indirect taxes
      • Royalty
      • PSC cost recovery
      • PSC profit sharing
      • Corporate income tax
      • Fiscal treatment of decommissioning
      • Product Pricing
    • Stability provisions
    • Split of the barrel and share of profit
    • Effective royalty rate and maximum government share
    • Progressivity
    • Fiscal deterrence

Tables and charts

This report includes 23 images and tables including:

  • Revenue flowchart - Lebanon PSC
  • Recent history of fiscal changes
  • Fiscal stability: Table 1
  • 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
  • Economics analysis: Table 2
  • Economics analysis: Table 3
  • Economics analysis: Table 4
  • 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
  • Bonuses, rentals and fees
  • Indirect taxes
  • Royalty rate - liquids (%)
  • Royalty rate (%)
  • Contractor profit share (%)
  • Contractor profit share (%)
  • Summary of modelled terms
  • Current licence, equity and fiscal terms: Table 6

What's included

This report contains:

  • Document

    Lebanon upstream fiscal summary

    PDF 809.75 KB

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