Country Report

Papua New Guinea upstream fiscal summary

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10 September 2019

Papua New Guinea upstream fiscal summary

Report summary

Upstream licences are awarded under concession terms through direct negotiations. Royalty and Social Development Levy (SDL) are payable, both at 2% rate, on the wellhead revenue. From 2017, all projects without 'fiscal stability' clause are subject to petroleum income tax and additional profits tax, both payable at 30% rate. Fiscal stability may be secured at the contract effective date in exchange of 2% increase in petroleum income tax. The government 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 government must repay the associated costs back to the investor on the landholder's behalf.

Table of contents

  • Basis
  • Licence terms
  • Government equity participation
    • Bonuses, rentals and fees
    • Indirect taxes
    • Royalty
    • Base
    • Rate
    • Payment schedule
    • Corporate income tax
    • Ring fencing
    • Rate
    • Payment schedule
    • Additional petroleum taxes
    • Additional profits tax (APT)
    • Ring fencing
    • Rate
    • Payment schedule
    • 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

Tables and charts

This report includes 15 images and tables including:

  • 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
  • Assumed terms by location - oil and gas

What's included

This report contains:

  • Document

    Papua New Guinea upstream fiscal summary

    PDF 910.54 KB

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