Country Report

South Korea upstream fiscal summary

28 June 2018

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28 June 2018

South Korea upstream fiscal summary

Report summary

South Korea's upstream sector is governed by a concession regime. The Ministry of Commerce, Industry and Energy (MOCIE) awards right for companies to explore for hydrocarbons in South Korean waters. National oil company (NOC) KNOC explores both on a sole-risk basis and with third parties. To date there have been no competitive bid rounds.

Executive summary
Current licence, equity and fiscal terms
- Basis
- License terms
- Government equity participation
- Fiscal terms
  - Ring fencing
  - Bonuses, rentals and fees
  - Indirect taxes
  - Royalty
    - Assumed terms: Royalty
  - Additional petroleum taxes
    - Domestic Market Obligation (DMO)
  - Corporate income tax
  - Product pricing
  - Summary of modelled terms
Fiscal stability
- Recent history of fiscal changes
- Stability provisions
Economic analysis
- Split of the barrel and share of profit
- Effective royalty rate and maximum government share
- Progressivity
- Fiscal deterrence