Papua New Guinea upstream fiscal summary Report

Country Report 25 May 2023

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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.

Basis
Licence terms
Government equity participation
Fiscal terms
- 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