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.