Peru upstream fiscal summary

Almost all blocks in Peru operate under licence contract (concession) terms. Blocks are offered in ad-hoc licensing rounds. In the most recent rounds, base royalty ranges between 20% and 35% for onshore licences, and between 15% and 35% for offshore licences. An additional royalty is a biddable parameter, and is added on top of all base royalty rates. The base rates are linked to the R-Factor. Companies can also re-negotiate royalty rates for existing contracts with Perupetro. Corporate income tax for petroleum companies is 31.5%, by 2% higher than the ordinary income tax. The tax rate is fixed for the duration of the contract and is protected by stability clauses. In addition, most of indirect taxes do not apply or are refundable during exploration.