Summary
Equatorial Guinea’s upstream fiscal and regulatory regime has been relatively stable since the introduction of the 2006 Hydrocarbons Code. Under country’s PSA regime licensees must pay a minimum 13% royalty, profit oil after cost recovery is shared with the state at negotiable levels, and corporate tax is levied at 35%. The government has held regular licensing rounds recently in 2012, 2014 and 2016 and is set to continue this with the launch of a new round. However, the government’s tough negotiating stance with existing operators may dent investor confidence.
“Equatorial Guinea Upstream Fiscal and Regulatory Report - New Bid Round Slated for January 2019”, presents the essential information relating to the terms which govern investment into Equatorial Guinea’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 Equatorial Guinea’s upstream oil and gas investment climate.
Scope
- Overview of current fiscal terms governing upstream oil and gas operations in Equatorial Guinea
- 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 Equatorial Guinea.
Reasons to buy
- Understand the complex regulations and contractual requirements applicable to Equatorial Guinea’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 6
4. Key Fiscal Terms 7
4.1. Royalties, Bonuses and Fees 7
4.1.1. Signature Bonus 7
4.1.2. Discovery Bonus 7
4.1.3. Production Bonus 7
4.1.4. Surface Rentals 8
4.1.5. Royalty 8
4.1.6. Training Contributions 9
4.2. Cost Recovery 10
4.2.1. Limit on Recovery 10
4.2.2. Recoverable Costs 10
4.3. Profit Sharing 10
4.4. Direct Taxation 11
4.4.1. Corporate Income Tax 11
4.4.2. Deductions and Depreciation 12
4.4.3. Withholding Tax 12
4.5. Indirect Taxation 12
4.5.1. Value Added Tax 12
4.5.2. Import Duty 12
4.6. State Participation 13
5. Regulation and Licensing 14
5.1. Legal Framework 14
5.1.1. Governing Law 14
5.1.2. Contract Type 14
5.1.3. Title to Hydrocarbons 14
5.2. Institutional Framework 15
5.2.1. Licensing Authority 15
5.2.2. Regulatory Agency 15
5.2.3. National Oil Company 15
5.3. Licensing Process 16
5.3.1. Licensing Rounds 16
5.3.2. Prequalification 16
5.3.3. Bidding 16
5.3.4. Bid Evaluation 17
5.4. License Terms 17
5.4.1. Duration and Relinquishments 17
5.4.2. Exploration Work Obligations 17
5.4.3. Management of Operations 18
5.5. Domestic Market Obligations 18
5.6. Local Content 18
5.7. Natural Gas 19
6. Outlook 20
7. Appendix 21
7.1. References 21
7.2. Contact Us 23
7.3. Disclaimer 23
1.1 List of Tables
Table 1: Regime Overview 4
Table 2: Equatorial Guinea, Minimum Signature Bonuses (US$), 2016 Round 7
Table 3: Equatorial Guinea, Production Bonuses (US$), Blocks S, W, EG-21 and EG-24 (2017) 8
Table 4: Equatorial Guinea, Production Bonuses (US$), Blocks F and G (2000) 8
Table 5: Equatorial Guinea, Royalty Rates (%), Blocks S, W, EG-21 and EG-24 (2017) 9
Table 6: Equatorial Guinea, Royalty Rates (%), Blocks F and G (2000) 9
Table 7: Equatorial Guinea, Profit-Sharing Framework,Blocks S, W and EG-21 (2017) 10
Table 8: Equatorial Guinea, Profit-Sharing Framework,Block EG-24 (2017) 11
Table 9: Equatorial Guinea, Profit-Sharing Framework,Blocks F and G (2000) 11
Table 10: Equatorial Guinea, Minimum Work Requirement, 2016 Round 18
Table 11: Equatorial Guinea, Local Content Threshold (%) 19
Table 12: References 21
1.2 List of Figures
Figure 1: Regime Flow Chart 5
Figure 2: Equatorial Guinea,Indicative NPV10/boe, IRR and State Take Comparison - Regional 6
Figure 3: Equatorial Guinea, Legal Framework 14
Figure 4: Equatorial Guinea, Institutional Framework 15
