Insight
Nigeria's proposed fiscal policy puts ultra-high costs firmly in the firing line
Report summary
After years of trying to pass the ill-fated Petroleum Industry Bill (PIB), the current administration has broken up the PIB and revised the fiscal proposals within a separate document: the National Petroleum Fiscal Policy. Wood Mackenzie's fiscal experts have engaged stakeholders on all sides of the debate. We bring you our in-depth economic analysis of the National Petroleum Fiscal Policy, blending it with our unique global perspective.
Table of contents
- Executive summary
- Basis of analysis
- NPFP principles and objectives
-
Comparison of the NPFP and current terms
- Royalty
- Taxes
-
Tax allowances and deductions
- Production allowances are a positive, if you qualify...
-
...but punitive limits on deductible costs are regressive
- International Cost Price Ratio comparison
-
Costs are key in the NPFP
- Gas costs will no longer be recoverable against oil revenues
-
Economic impact on current investors (fiscal disruption)
- Concessions
- PSCs
-
Pre-FID projects
- Breakeven prices of pre-FID deepwater projects (NPV15)
- Impact on government revenues
-
Economic impact on new investment (fiscal evolution)
- New small onshore oil discoveries
- New shelf oil discoveries
- New deepwater oil discoveries
- New onshore wet gas discovery
- Will the NPFP become law?
- Conclusion
Tables and charts
This report includes 19 images and tables including:
- NPFP aims and instruments
- Nigeria's proposed fiscal policy puts ultra-high costs firmly in the firing line: Image 2
- Forecast of average realised oil royalty (post-2017)
- Current and NPFP tax rates
- Forecast average realised tax rates (post-2017)
- Simplified illustration of NHT calculation, TIP and production allowance for new deepwater production
- Nigeria's proposed fiscal policy puts ultra-high costs firmly in the firing line: Image 6
- Investor value change by contract type
- Value and scale of fiscal changes in top 20 IOC jurisdictions (NPV10, base case)
- NNPC-Majors JVs (NPV10)
- Top ten indigenous companies (NPV10)
- Deepwater PSC value change (NPV10)
- Change in annual government revenues
- Split of the barrel
- Key metrics for new investment: onshore oil
- Key metrics for new investment: shelf oil
- Key metrics for new investment: deepwater oil
- Key metrics for new investment: onshore wet gas
- Nigeria's proposed fiscal policy puts ultra-high costs firmly in the firing line: Image 11
What's included
This report contains:
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