Turkmenistan upstream fiscal summary Report

Country Report 25 May 2023

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Report summary

Upstream licences are awarded under service contract terms for onshore and production sharing contract terms (PSCs) for offshore projects. PSC terms vary from contract to contract because of the ad-hoc nature of negotiations and the fact that a number of the terms are negotiable items. The level of negotiated government share generally reflects the level of expenditure and risk involved. Royalty varies with production rates, whilst profit oil splits vary on a sliding scale based on R-Factor. Cost recovety ceiling is based on a flat rate. Signature, production and commerciality bonuses are biddable items. Corporate income tax at 20% rate is payable. In PSCs, the state participates via wholly-owned Turkmenneft, which normally takes a 10-50% stake, carried through the exploration phase. Another state-owned company Turkmengaz currently owns 100% of most onshore gas projects, with IOCs contributing on a service basis only.

Basis
Licence terms
Government equity participation
Fiscal terms
- Ring fencing
- Bonuses, rentals and fees
- Indirect taxes
- Royalty
- Ring fencing
- Base
- Rate
- Payment schedule
- 16 more item(s)...
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