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Iraq Upstream Fiscal and Regulatory Report - Sector Challenged by Regulatory Uncertainty and Tough Fiscal Terms

Iraq Upstream Fiscal and Regulatory Report - Sector Challenged by Regulatory Uncertainty and Tough Fiscal Terms

Summary

In April 2018, Iraq held its fifth licensing round on the basis of a new model version of service contracts introduced in the previous weeks. However, with these new service contracts, the levels of state take are among the highest in the world and this explains why the bid round obtained mixed results with only 6 blocks assigned out of 11 on offer and no major international oil companies among the winners. In March 2018, Parliament passed legislation, still to be implemented by the government, whose goal is to reform completely the management of Iraq’s petroleum sector, but the regulatory outlook remains uncertain. The most important element of the legislation would be to re-establish the Iraq National Oil Company, which would be put in charge of Iraq’s petroleum contracts and would be the holding company controlling Iraq’s regional oil companies.

“Iraq Upstream Fiscal and Regulatory Report - Sector Challenged by Regulatory Uncertainty and Tough Fiscal Terms”, presents the essential information relating to the terms which govern investment into Iraq’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 Iraq’s 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 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 Iraq.
Reasons to buy
  • Understand the complex regulations and contractual requirements applicable to Iraq’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.


  • Regime Overview
    • Table Iraq Regime Overview
    • Table Figure 1: Iraq Regime Flow Chart – Service Contract (Fifth Round)
    • Table Figure 2: Iraq Regime Flow Chart – Production Sharing Contract
  • State Take Assessment
    • Table Figure 3: Indicative NPV10/boe, IRR and State Take Comparison, Regional Comparison – 2018
  • Key Fiscal Terms– Service Contract
    • Bonuses and Fees
      • Signature Bonus
        • Table Iraq, Signature Bonuses for First Four Licensing Rounds
      • Commerciality BonusRound 5 Contracts
      • Employment, Training, and Technology Transfer Fund
      • Infrastructure FundRound 5 Contracts
    • Royalty–Round 5 Contracts
    • Cost Recovery – Round 5 Contracts
      • Cost Recovery Limit
      • Recoverable Costs
    • Remuneration – Round 5 Contracts
      • Table Iraq, Winning Remuneration Percentage Bids, Fifth Licensing Round (2018)
    • Service Fees – Round 1-4 Contracts
      • Table Iraq –Service Contracts, Production Targets and Plateau Periods, First Four Licensing Rounds
      • Recoverable Costs
      • Remuneration Fees
        • Table Iraq – Service Contract, Remuneration Fee, First Four Licensing Rounds
        • Table Iraq, Service Contract, Remuneration Fee Adjustment Factors – Rounds 1–3
        • Table Iraq, Service Contract, Remuneration Fee Adjustment Factors – Round 4
    • Supplementary Fees Rounds 1-4
    • Taxation
      • Corporate Income Tax
      • Customs Duties
      • Transfer TaxFifth Licensing Round
    • State Participation
    • Abandonment and Site Restoration
  • Key Fiscal Terms – Production Sharing Agreement
    • Bonuses
      • Signature and Capacity Building Bonus
        • Table Iraq, PSA, Signature and Capacity Building Bonuses (US$) – Selected PSAs, 2006–2011
        • Table Iraq, PSA, Capacity Building Bonuses, Additional Payments, 2007 and 2008
      • Production Bonus
        • Table Iraq, PSA, Production Bonuses (US$), Standard Rates and Other Variations
        • Table Iraq, PSA, Production Bonuses (US$), Arbat and Baranan PSAs
        • Table Iraqi Kurdistan, Production Bonuses (US$), Acquired Government Interest Stakes, Harir, Safen and Garmian PSAs
        • Table Iraqi, Production Bonuses By Cumulative Production Levels (US$), Wasit Province PSA
      • Additional Project Funding Support
    • Surface Rentals
    • Fees and Contributions
      • Personnel Fees
      • Training Fees
        • Table Iraqi Kurdistan, Training Fees By Project Phase, Selected PSAs
      • Environment Fund Contributions
        • Table Iraqi Kurdistan, Environment Fund Contributions By Project Phase (US$), Selected PSAs
      • Technological and Logistical Assistance Contributions
        • Table Iraqi Kurdistan, Technological and Logistical Assistance Contributions (US$), Selected PSAs
    • Royalty
    • Cost Recovery
      • Cost Recovery Limit
        • Table Iraq, PSA, Cost Recovery Limits (%), Selected PSAs
      • Recoverable Costs
    • Profit Sharing
      • Table Iraq, PSA, Contractor's Share of Profit Oil (%), 2007 Atrush PSA
      • Table Iraq – PSA, Contractor's Share of Profit Oil (%) for PSAs Issued from 2006 to 2011
      • Table Iraq – PSA, Contractor's Share of Profit Oil (%), 2011 Salah ad Din PSA
      • Table Iraq – PSA, Contractor's Share of Profit Oil (%), 2011 Wasit PSA
    • Capacity Building Payments
      • Table Iraq – PSA, Profit Oil Capacity Building Payments, Selected PSAs
      • Table Iraq – PSA, Capacity Building Payments, Selected PSAs
      • Table Iraq – PSA, Capacity Building Payments, Atrush and Sarsang PSAs, 2007
      • Table Iraq – PSA, Capacity Building Payments, Hawler PSA, 2007
      • Table Iraq – PSA, Capacity Building Payments, Kurdamir PSA
      • Table Iraq – PSA, Capacity Building Payments, Safen and Harir PSAs, 2010
      • Table Iraq – PSA, Capacity Building Payments, Qala Dze, Piramagrun and Taza PSAs, 2011
    • Direct Taxation
      • Corporate Income Tax
      • Deductions and Depreciation
        • Table Iraq – PSA, Kurdistan Depreciation Rates (%)
    • Customs Duties
    • State Participation
  • Regulation and Licensing
    • Legal Framework
      • Table Figure 4: Iraq, Legal Framework
      • Governing Laws
      • Contract Type
      • Title to Hydrocarbons
    • Institutional Framework
      • Table Figure 5: Iraq, Institutional Framework
      • Licensing Authority
      • Regulatory Agency
      • National Oil Company
      • Joint Management of Petroleum Operations
    • Licensing Process
      • Federal Licensing Rounds
      • Bidding in Federal Rounds
    • License Terms
      • Duration
      • Work Obligations
      • Gas and Natural Gas Liquids Obligations
      • Relinquishment
    • Local Content
  • Outlook
  • Appendix
    • References
      • Table References
    • Contact Us
    • Disclaimer

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