Democratic Republic of the Congo Upstream Fiscal and Regulatory Report - Political Instability May Hamper New Licensing and Exploration

GlobalData
31 Pages - GLDATA65803
$1,500.00

Summary

The oil and gas fiscal and regulatory regime in the Democratic Republic of the Congo (DRC) has recently experienced significant change with the introduction of new legislation governing the sector in 2015-2016. However, the lack of any new contracts means that the implementation of the new regime is uncertain. While the country has significant open acreage available, environmental opposition to the government’s efforts at opening up parts of two national parks and political issues internally and with neighboring countries could hamper progress.

“Democratic Republic of the Congo Upstream Fiscal and Regulatory Report - Political Instability May Hamper New Licensing and Exploration”, presents the essential information relating to the terms which govern investment into Democratic Republic of the Congo’s 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 state’s take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Democratic Republic of the Congo’s upstream oil and gas investment climate.

Scope

- Overview of current fiscal terms governing upstream oil and gas operations in Democratic Republic of the Congo
- Assessment of the current fiscal regime’s 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 Democratic Republic of the Congo.

Reasons to buy

- Understand the complex regulations and contractual requirements applicable to Democratic Republic of the Congo’s upstream oil and gas sector
- Evaluate factors determining profit levels in the industry
- Identify potential regulatory issues facing investors in the country’s upstream sector
- Utilize considered insight on future trends to inform decision-making.

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1 Table of Contents
1 Table of Contents 1
1.1. List of Tables 3
1.2. List of Figures 3
2. Regime Overview 4
3. State Take Assessment 8
4. Key Fiscal Terms-Production Sharing Agreements 9
4.1. Royalties, Bonuses and Fees 9
4.1.1. Royalties 9
4.1.2. Statistical Tax 10
4.1.3. Bonuses 10
4.1.4. Surface Fees 11
4.2. Cost Recovery 11
4.2.1. Limit on Recovery 11
4.2.2. Recoverable Costs 12
4.2.3. Excess Cost Oil 12
4.3. Profit Sharing 13
4.3.1. Profit Oil 13
4.3.2. Super Profit Oil 14
4.4. Direct Taxation 15
4.4.1. Petroleum Income Tax 15
4.4.2. Transfer of Interest Tax 15
4.5. Indirect Taxation 15
4.5.1. Value Added Tax 15
4.5.2. Customs Duties 15
4.6. State Participation 16
4.7. Abandonment Fund 16
4.8. Fiscal Stabilization 16
5. Key Fiscal Terms - Concessions 17
5.1. Royalties, Bonuses and Fees 17
5.1.1. Bonuses 17
5.1.2. Royalties (Only Applicable to the Onshore Concession) 17
5.1.3. Statistical Tax (Only Applicable to the Offshore Concession) 17
5.2. Direct Taxation 18
5.2.1. Profit-Share Tax (Only Applicable to the Offshore Concession) 18
5.2.2. State participation tax (Only Applicable to the Offshore Concession) 18
5.2.3. Corporate Income Tax 18
5.2.4. Dividend (Only Applicable to the Onshore Concession) 18
5.2.5. Deductions and Depreciation 18
5.3. Indirect Taxation 19
5.3.1. Value Added Tax 19
5.3.2. Customs Duties 19
6. Regulation and Licensing 20
6.1. Legal Framework 20
6.1.1. Governing Law 20
6.1.2. Contract Type 21
6.1.3. Title to Hydrocarbons 21
6.2. Institutional Framework 22
6.2.1. Licensing Authority 22
6.2.2. Regulatory Agency 22
6.2.3. National Oil Company 22
6.3. Licensing Process 23
6.4. License Terms 23
6.4.1. Duration and Relinquishments 23
6.4.2. Work Obligation ─ PSAs 23
6.4.3. Management of Operations 24
6.5. Local Content─ PSAs 24
7. Outlook 26
8. Appendix 28
8.1. References 28
8.2. Contact Us 30
8.3. Disclaimer 30

1.1 List of Tables
Table 1: Regime Overview 4
Table 2: DRC, Royalty Rates, Pre-2015 PSAs 10
Table 3: DRC, Bonuses, Blocks I & II of the Graben Albertine (May 2010) 11
Table 4: DRC, Cost Recovery Limit by Fiscal Zone 12
Table 5: DRC, Minimum State Share of Profit Oil by Fiscal Zone 13
Table 6: DRC, State Share of Profit-Oil, Pre-2015 PSAs 14
Table 7: PSA Block Nganzi (2006) ─Exploration minimal works program 24
Table 8: References 28

1.2 List of Figures
Figure 1: Regime Flow Chart - PSA 5
Figure 2: Regime Flow Chart - Offshore Concession 6
Figure 3: Regime Flow Chart - Onshore concession 7
Figure 4: DRC, Indicative NPV10/boe, IRR and State Take Comparison, Regional 8
Figure 5: The Democratic Republic of the Congo, Legal Framework 20
Figure 6: The Democratic Republic of the Congo, Institutional Framework 22

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