Cyprus Upstream Fiscal and Regulatory Report - 3rd Licensing Round Looks to Capitalize on Neighbouring Zohr Discovery


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Cyprus Upstream Fiscal and Regulatory Report - 3rd Licensing Round Looks to Capitalize on Neighbouring Zohr Discovery

Summary

Cyprus Upstream Fiscal and Regulatory Report - 3rd Licensing Round Looks to Capitalize on Neighbouring Zohr Discovery, presents the essential information relating to the terms which govern investment into Cypruss upstream oil and gas sector. The report sets out in detail the contractual framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the states take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Cypruss upstream oil and gas investment climate.

Scope

- Overview of current fiscal terms governing upstream oil and gas operations in Cyprus
- Assessment of the current fiscal regimes state take and attractiveness to investors
- Charts illustrating the regime structure, and legal and institutional frameworks
- Detail on legal framework and governing bodies administering the industry
- Levels of upfront payments and taxation applicable to oil and gas production
- Information on application of fiscal and regulatory terms to specific licenses
- Outlook on future of fiscal and regulatory terms in Cyprus

Reasons to buy

- Understand the complex regulations and contractual requirements applicable to Cypruss upstream oil and gas sector
- Evaluate factors determining profit levels in the industry
- Identify potential regulatory issues facing investors in the countrys upstream sector
- Utilize considered insight on future trends to inform decision-making
1 Table of Contents
1 Table of Contents 1
1.1 List of Tables 2
1.2 List of Figures 2
2 Regime Overview 3
3 Fiscal Take Assessment 5
4 Key Fiscal Terms 6
4.1 Signature Bonus 6
4.2 Production Bonus 6
4.3 Rental Fees 6
4.4 Training Contributions 6
4.5 Cost Recovery 6
4.5.1 Cost Recovery Limit 6
4.5.2 Recoverable Costs 6
4.6 Profit-Sharing 7
4.6.1 2nd and 3rd Licensing Rounds 7
4.6.2 1st Licensing Round 8
4.7 Direct Taxation 8
4.7.1 Corporation Tax 8
4.7.2 Deductions and Depreciation 8
4.7.3 Withholding Tax 8
4.7.4 Capital Gains Tax 8
4.8 Indirect Taxation 9
4.8.1 VAT 9
4.8.2 Customs Duties 9
4.9 EU Emissions Trading Scheme 9
5 Regulation and Licensing 10
5.1 Legal Framework 10
5.1.1 Governing Law 10
5.1.2 Contract Type 10
5.1.3 Title to Hydrocarbons 10
5.2 Institutional Framework 11
5.2.1 Licensing Authority 11
5.2.2 Regulatory Agency 11
5.2.3 National Oil Company 11
5.3 Licensing Process 11
5.3.1 Licensing Rounds 11
5.3.2 License Applications 12
5.3.3 Evaluation of Applications 13
5.4 License Terms 14
5.4.1 Duration and Relinquishments 14
5.4.2 Exploration Obligations 15
5.5 Operational Regulations 15
5.5.1 Work Programs and Drilling 15
5.5.2 Discoveries and Declarations of Commerciality 15
5.5.3 Development and Production Plan 15
5.5.4 Decommissioning Plan 16
5.6 Environmental Regulations 17
5.6.1 Environmental Impact Assessments 17
5.6.2 Environment Management Plan 17
5.6.3 Contingency Planning 17
5.6.4 Barcelona Convention 17
5.7 Local Content 17
5.8 Gas Development 18
6 Outlook 19
7 Contact Information 20

1.1 List of Tables
Table 1: Summary 3
Table 2: Cyprus, Annual Rental Fees (US$/km2), 1st, 2nd and 3rd Licensing Rounds 6
Table 3: Cyprus, Profit-Sharing Mechanism, 2nd and 3rd Licensing Round 7
Table 4: Cyprus, Profit Oil Sharing, Block 12 (1st Licensing Round) 8
Table 5: Cyprus, Profit Gas Sharing, Block 12 (1st Licensing Round) 8
Table 6: Cyprus, Licensing Rounds, 2007-2016 12
Table 7: Cyprus, Legal, Technical and Financial Capacity Documentation, 3rd Licensing Round, 2016 13
Table 8: Cyprus, Technical and Financial Proposal Mark Scheme, 3rd Licensing Round 14

1.2 List of Figures
Figure 1: Regime Flow Chart 4
Figure 2: Cyprus, Indicative NPV10/boe, IRR and Fiscal Take Comparison - Regional, 2015 5
Figure 3: Cyprus, Legal Framework 10
Figure 4: Cyprus, Institutional Framework 11