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Papua New Guinea upstream fiscal summary

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04 July 2018

Papua New Guinea upstream fiscal summary

Report summary

Upstream licences are awarded under concession terms through direct negotiations. The State may acquire up to 22.5%  in a licence, which is carried through the development phase, with repayment from its share of revenue. From this, a 2% working interest is allocated to the landowners, who are not liable for any pre-production costs. The State must repay the associated costs back to the investor on the landholder's behalf. Royalty and Social Development Levy (SDL) are payable, both at 2% rate, on the wellhead revenue, though royalty is credited against income tax. From 2017, all projects without 'fiscal stability' clause are subject to petroleum income tax and additional profits tax payable by the contractor at 30% rate. Fiscal stability may be secured at the contract effective date in exchange of 2% increase in petroleum income tax.

Table of contents

  • Executive summary
    • Basis
    • Licence terms
    • Government equity participation
    • Fiscal terms
      • Ring fencing
      • Bonuses, rentals and fees
      • Indirect taxes
      • Royalty
        • Social development levy (SDL)
      • Corporate income tax
      • Additional petroleum taxes
        • Additional profits tax (APT)
      • Fiscal treatment of decommissioning
      • Product pricing
      • Summary of modelled terms
        • Assumed terms by location - oil and gas
    • 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

Tables and charts

This report includes 16 images and tables including:

  • Revenue flow chart: Papua New Guinea Concession
  • Timeline
  • Timeline detail
  • 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 - oil and gas
  • Maximum government share and maximum state share - oil and gas
  • 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
  • Current licence, equity and fiscal terms: Table 3

What's included

This report contains:

  • Document

    Papua New Guinea upstream fiscal summary

    PDF 266.72 KB

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