Iraq Upstream Fiscal and Regulatory Report - Movement on Long-Delayed Hydrocarbons Law Appears Unlikely


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Iraq Upstream Fiscal and Regulatory Report - Movement on Long-Delayed Hydrocarbons Law Appears Unlikely

Summary

Iraq Upstream Fiscal and Regulatory Report - Movement on Long-Delayed Hydrocarbons Law Appears Unlikely, presents the essential information relating to the terms which govern investment into Iraqs 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 Iraqs upstream oil and gas investment climate.

Scope

- Overview of current fiscal terms governing upstream oil and gas operations in Iraq
- 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 Iraq

Reasons to buy

- Understand the complex regulations and contractual requirements applicable to Iraqs 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 State Take Assessment 6
4 Key Fiscal Terms - Service Contract 7
4.1 Signature Bonus 7
4.2 Employment, Training and Technology Transfer Fund 7
4.3 Service Fees 7
4.3.1 Cost Recovery 9
4.3.2 Remuneration Fees 9
4.4 Supplementary Fees 11
4.5 Taxation 12
4.5.1 Corporate Income Tax 12
4.6 Customs Duties 12
4.7 State Participation 12
5 Key Fiscal Terms - Production Sharing Agreement 13
5.1 Bonuses 13
5.1.1 Signature and Capacity Building Bonus 13
5.1.2 Production Bonus 14
5.1.3 Additional Project Funding Support 16
5.2 Surface Rentals 16
5.3 Fees and Contributions 16
5.3.1 Personnel Fees 16
5.3.2 Training Fees 17
5.3.3 Environment Fund Contributions 17
5.3.4 Technological and Logistical Assistance Contributions 18
5.4 Royalty 18
5.5 Cost Recovery 18
5.5.1 Cost Recovery Limit 18
5.5.2 Recoverable Costs 19
5.6 Profit Sharing 19
5.7 Capacity Building Payments 23
5.8 Direct Taxation 26
5.8.1 Corporate Income Tax 26
5.8.2 Deductions and Depreciation 26
5.9 Customs Duties 26
5.10 State Participation 26
6 Regulation and Licensing 27
6.1 Legal Framework 27
6.1.1 Governing Law 27
6.1.2 Contract Type 27
6.1.3 Title to Hydrocarbons 27
6.2 Institutional Framework 28
6.2.1 Licensing Authority 28
6.2.2 Regulatory Agency 28
6.2.3 National Oil Company 28
6.3 Licensing Process 29
6.3.1 Federal Licensing Rounds 29
6.3.2 Bidding in Federal Rounds 29
6.4 License Terms 30
6.4.1 Duration 30
6.4.2 Obligations 30
6.5 Local Content 30
7 Outlook 31
8 Contact Information 32

1.1 List of Tables
Table 1: Summary 3
Table 2: Iraq - Service Contract, Signature Bonus (US$ mm) by License, 2016 7
Table 3: Iraq - Service Contract, Production Targets and Plateau Periods, 2016 9
Table 4: Iraq - Service Contract, Remuneration Fee Bid by License, 2016 10
Table 5: Iraq - Service Contract, Remuneration Fee Adjustment Factors - Rounds 1-3, 2016 10
Table 6: Iraq - Service Contract, Remuneration Fee Adjustment Factors - Round 4, 2016 11
Table 7: Iraq - PSA, Signature and Capacity Building Bonuses (US$) - Selected PSAs, 2006-2011 13
Table 8: Iraq - PSA, Capacity Building Bonuses, Additional Payments, 2007 and 2008 14
Table 9: Iraq - PSA, Production Bonuses (US$), Standard Rates 14
Table 10: Iraq - PSA, Production Bonuses (US$), Atrush, Bazian, Kurdamir, Sangaw North and Garmian PSAs 15
Table 11: Iraq - PSA, Production Bonuses (US$), Arbat and Baranan PSAs, 2009 15
Table 12: Iraqi Kurdistan, Production Bonuses (US$), Acquired Government Interest Stakes, Harir, Safen and Garmian PSAs 16
Table 13: Iraqi, Production Bonuses By Cumulative Production Levels (US$), Wasit PSA 16
Table 14: Iraqi Kurdistan, Training Fees By Project Phase, Selected PSAs 17
Table 15: Iraqi Kurdistan, Environment Fund Contributions By Project Phase (US$), Selected PSAs 17
Table 16: Iraqi Kurdistan, Technological and Logistical Assistance Contributions (US$), Selected PSAs 18
Table 17: Iraq - PSA, Cost Recovery Limits (%), Selected PSAs 19
Table 18: Iraq - PSA, Contractors Share of Profit Oil (%), 2007 Atrush PSA 20
Table 19: Iraq - PSA, Production Sharing Terms, Contractor Share (%), Selected PSAs 21
Table 20: Iraq - PSA, Contractors Share of Profit Oil (%), 2011 Saladin PSA 22
Table 21: Iraq - PSA, Contractors Share of Profit Oil (%), 2011 Wasit PSA 22
Table 22: Iraq - PSA, Profit Oil Capacity Building Payments, Selected PSAs 23
Table 23: Iraq - PSA, Capacity Building Payments, Selected PSAs 23
Table 24: Iraq - PSA, Capacity Building Payments, Atrush and Sarsang PSAs, 2007 24
Table 25: Iraq - PSA, Capacity Building Payments, Hawler PSA, 2007 24
Table 26: Iraq - PSA, Capacity Building Payments, Kurdamir PSA 24
Table 27: Iraq - PSA, Capacity Building Payments, Safen and Harir PSAs, 2010 25
Table 28: Iraq - PSA, Capacity Building Payments, Qala Dze, Piramagrun and Taza PSAs, 2011 25
Table 29: Iraq - PSA, Kurdistan Depreciation Rates (%), 2016 26

1.2 List of Figures
Figure 1: Regime Flow Chart - Service Contract 4
Figure 2: Regime Flow Chart - Production Sharing Agreement 5
Figure 3: Iraq, Indicative NPV10/boe, IRR and State Take Comparison - Internal, 2016 6
Figure 4: Iraq, Indicative NPV10/boe, IRR and State Take Comparison - Resource Peer Group, 2016 6
Figure 5: Iraq, Legal Framework 27
Figure 6: Iraq, Institutional Framework 28