Upstream fiscal systems in brief

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The upstream fiscal systems in brief provides our opinion and analysis on the latest stories and trends related to upstream petroleum fiscal systems. We report on four main themes: fiscal disruption that impacts existing assets, fiscal evolution where changes that affect new licences, details and implications of ongoing discussions and biddable terms where terms are part of a competitive bidding process.

Table of contents

  • Ongoing discussions: A second Trump term impact on US upstream
  • Ongoing discussions: Argentina proposes CIT change
  • Biddable terms: first Bangladesh licensing round since 2012
  • Fiscal disruption: Equatorial Guinea reduces income tax to attract oil investments
  • Fiscal evolution: New US federal leasing rules
  • Fiscal disruption: Hydrocarbon Duty reduced for Mexico's PEMEX amid debt concerns
  • Ongoing discussions: Louisiana severance tax cuts
  • Ongoing discussions: New Mexico withholds some lease sales for higher royalty rates
  • Biddable terms: Zanzibar announces first licensing round
  • Fiscal disruption: UK extends energy profits levy (EPL) by one year
  • Ongoing discussions: Labour's tax proposal in the UK poses a significant threat to investment in the North Sea
  • Fiscal disruption: The Netherlands’ Schoonebeek to redevelop with a production-based levy
  • Fiscal evolution: Vietnam bolsters fiscal terms in their new Petroleum Law
  • Fiscal evolution: Modifications announced to India's OALP for bid round VIII and beyond
  • Ongoing discussions: US bonus depreciation phase-out
  • Fiscal evolution: Romania hikes oil and gas royalty rates
  • Fiscal disruption: Romania introduces turnover tax for upstream industry
  • Ongoing discussions: UK government publishes new measures arising from fiscal consultations
  • Fiscal disruption: Colombia's court strikes down royalty deduction changes
  • Fiscal disruption: Complex projects in Kazakhstan receive export duty holiday
  • Fiscal evolution: UK Government launches long-term fiscal review (excluding the EPL)
    • Europe
    • Fiscal evolution: UK introduces price floor for Energy Profits Levy (EPL)
    • Ongoing discussion: The cap on deductions proposed for Petroleum Resource Rent Tax (PRRT) LNG payers
    • Fiscal disruption: Romania n parliament to soften its application of EU s temporary law on solidarity contribution charged to energy companies
    • Europe
    • Ongoing discussion: Cost recovery challenged for Kashagan and Karachaganak megaprojects in Kazakhstan
    • Russia and Caspian
    • Fiscal disruption: Kazakhstan makes first use of ‘improved model contract’ for concessions
    • Russia and Caspian
    • Insight: Petroleum fiscal systems: 2022 in review
    • Global
    • Insight: Global upstream fiscal systems: 4 things to look for in 2023
    • Global
    • Ongoing discussions: Netherlands introduces temporary gas windfall tax and solidarity contribution charge
    • Europe
    • Fiscal evolution: Guyana increases the county's share for the first bid round since Liza-Payara discovery
    • Latin America
    • Insight: Windfall taxes - the search for a smart policy
    • Global
    • Fiscal disruption: UK increases and extends the energy profits levy (EPL)
    • Europe
    • Ongoing discussions: Malaysia proposes new CCS incentives
    • South East Asia
    • Fiscal disruption: Hungarian government changes upstream royalty rates for 2022 and 2023 and amends calculations for additional royalty
    • Europe
    • Fiscal evolution: Inflation Reduction Act
    • North America
    • Ongoing discussions: New Colombian government pushes for big tax increases
    • Latin America
    • Ongoing discussions: Argentina considers one-time Windfall Tax
    • Latin America
    • Fiscal disruption: India imposes windfall levy on oil producers
    • Asia Pacific
    • Fiscal disruption: Romania passes reforms to 2018 offshore law
    • Europe
    • Fiscal disruption: UK imposes energy profits levy (EPL) on upstream producers
    • Europe
    • Fiscal evolution: US royalty rates raising for new onshore leases
    • North America
    • Ongoing discussions: Norway's reforms sent to the Storting
    • Europe
    • US removing bonus depreciation: scratch or scar?
    • North America
    • Fiscal disruption: Ukraine reforms its onshore gas royalty rates
    • Europe
    • Fiscal disruption: Nigeria nominally increases the education tax
    • Sub-Saharan Africa
    • Fiscal disruption: Kazakhstan introduces price-based oil export duty exemption for offshore fields
    • Fiscal disruption: Uzbekistan introduces new fiscal incentives
    • Ongoing discussions: Implications Norway's oil and gas sector as Labour wins election
    • Europe
    • Ongoing discussion: Nigeria's Petroleum Industry Bill signed into law
    • Sub-Saharan Africa
    • Ongoing discussion: Ecuador pushes for investment by expanding their new PSC
    • Latin America
    • Insight: Global decommissioning anxiety rises
    • Global
    • Ongoing discussion: Nigerian parliament passes Petroleum Industry Bill
    • Sub-Saharan Africa
    • Ongoing discussion: South Africa’s updated petroleum resources bill sent to parliament
    • Sub-Saharan Africa
    • Fiscal webinar: carbon taxes and upstream subsidy debate
    • Fiscal discussion: Ukraine targets fiscal reforms to support 2030 gas ambitions
    • Europe
    • Ongoing discussion: Kazakhstan evaluates oil export duty cancellation
    • Fiscal disruption: the Netherlands finally improves the SPS investment allowance
    • Europe
    • Fiscal evolution: Malaysia introduces Enhanced Profitability and Late Life Asset PSC terms for 2021 licensing round
    • Asia Pacific
    • Fiscal disruption: Norway sets out carbon tax rise in climate action plan
    • Europe
    • What’s ahead for oil and gas fiscal systems in 2021?

Tables and charts

This report includes 77 images and tables including:

  • Top statutory corporate tax rates around the world
  • Example onshore oil and gas project competitiveness: Argentina CIT change has minimal impact
  • Summary of fiscal changes
  • Maximum contractor profit share
  • Investment metrics for medium-size, medium-cost, gas field under new and old fiscal frameworks
  • Remaining post-tax NPV before and after CIT change for different regimes
  • Summary of changes to BLM leases
  • Impact on PEMEX concessions
  • Impact of ordinary hydrocarbon duty changes on net cashflow
  • Proposed severance tax rates for producing wells
  • Proposed severance tax rates for orphaned and inactive wells
  • L48 comparison of effective base severance tax rates
  • Effective royalty and maximum state share for oil
  • Sub-Saharan Africa upstream competitiveness index
  • Schoonebeek redevelopment cash flow and production profile
  • Vietnam fiscal terms comparison – Petroleum Law 2022
  • Ca Voi Xanh’s economics
  • Chart 1: Post-tax NPV comparison for different LRP-HRP scenarios before and after changes
  • Chart 2: Windfall levy and stabilisation period change effects on post-tax NPV
  • Example drilling cost capitalization for integrated oil companies in 2024
  • Example tax shield of drilling cost capitalization for integrated oil companies in 2024
  • The diminishing tax shield of drilling costs
  • The diminishing tax-shield value of drilling expenditures
  • Table 1: Oil and gas royalty rates
  • Chart 1: Impact of increase in oil royalty
  • Chart 2: Impact of increase in gas royalty
  • Fiscal disruption: Romania Concession - Turnover Taxes
  • Colombian NPV10 value changes by legislation
  • Fiscal disruption: Kazakhstan Concession - Export Duty Holiday
  • Kazakhstan Concession- valuation impact of changes (remaining NPV10 at start-2023)
  • Applicability of temporary solidarity contribution across EU member states
  • Fiscal disruption: Temporary solidarity contribution across EU countries
  • Fiscal disruption: Temporary solidarity contribution impact on EU countries
  • Incremental government cash flows (A$ billion)
  • Romania - valuation impact of changes (remaining NPV10 at start-2023)
  • Scenario Analysis: Kazakhstan PSC - Cost recovery dispute
  • Kazakhstan - Alternative Subsoil Tax (AST rates)
  • Fiscal disruption: Netherland Concession Windfall & Temporary solidarity charge
  • Asset by asset impact on temporary tax increase
  • Guyana government share comparison
  • Recent fiscal changes and proposals
  • Effective tax rate and capital tax relief
  • Extra profit tax (royalty rates) - oil and gas (2022 and 2023 only)
  • Fiscal disruption: Impact of fiscal changes in Hungary Concession
  • Economic impact of federal royalty increase on government acreage type wells
  • States receiving the most oil and gas disbursements from federal royalties
  • Fiscal comparison
  • IDC and bonus depreciation sensitivity
  • Impact on state taxes
  • Ukraine - onshore gas royalty rates
  • Impact of new royalty rate thresholds
  • Overall impact of education tax increase
  • Asset by asset impact of education tax increase
  • Oil export duty - price thresholds (nominal terms)
  • Impact of oil export duty exemption on key offshore projects
  • Uzbekistan - new incentives
  • Project IRR: non-taxpayer vs. taxpayer
  • Project net cash flow: non-taxpayer
  • PIA royalty rates
  • PIA tax rates
  • PIB legislative timeline
  • Global comparison of state participation
  • Global comparison of state share
  • Deepwater: state share and investor IRR
  • Onshore: state share and investor IRR
  • Potential impact of zero oil export duty on offshore project economics
  • Fiscal disruptions - Netherlands increased SPS investment allowance
  • Malaysia - new fiscal terms
  • Cost recovery ceiling - EPT vs R/C PSC
  • Contractor profit share - EPT vs R/C PSC
  • EPT vs R/C comparison - shelf model field
  • The cost of Norway's carbon price 2020 vs. 2030 (USD/tCO2)

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