|
|
| |
| Contract
type |
Concession
system |
|
|
| Contract
period (years) |
|
|
• Exploration |
3 + 3 (with 3 years extendable) |
|
• Production |
20
(with 10 years extendable) starting immediately
after the end of the exploration period. |
|
|
| Contract
Area |
|
| •
Exploration Block |
As defined in the bid announcement. Each concessionaire
can hold up to five exploration blocks with a total
area of not exceeding 20,000 square kilometers.
Area relinquishment is 50% at the end of year 4
and another 25% at the end of year 6. |
•
Production Area
|
With commercial discovery, production area will
be delineated and production can start right away
even in the exploration period. |
| •
Reserved Area |
In
the case the production area is declared, 12.5%
of the original exploration area can be reserved
for further exploration for another period of 5
years after the end of the exploration period. |
|
|
| Exploration
Work Program |
After
careful evaluation of geological data available
the bidders will propose an exploration work program
for each period. The work program can be revised
to suit the information acquired from the work performed.
Reduction of work commitment for extra area relinquished
or waive of work commitment for area surrendered
is allowed beyond the first three years. |
|
|
| Bonuses
& State Participation |
Voluntary
basis. |
|
| |
|
|
|
| |
Fiscal
Terms |
| |
| Royalty |
To
be paid in a sliding scale rate corresponding with
the revenue from petroleum sold or disposed of as
follows: |
|
|
Monthly
Sale Volume (Barrel x 103)
|
Rate
(%)
|
|
0
- 60
|
5.00
|
|
60
- 150
|
6.25
|
|
150
- 300
|
10.00
|
|
300
- 600
|
12.50
|
|
>
600
|
15.00
|
|
|
10
million BTU/Barrel is used as conversion factor
for natural gas. Royalty on petroleum produced from
deep water Andaman Sea area and some certain areas
selected by the government will be only 70% of the
above rate |
|
|
| Petroleum
Income Tax |
50%
of net profit of the company and no ringfence for
cost deduction. Royalty and SRB paid can be treated
as tax deductible expenses. |
|
|
| Supplemental
Tax |
Special Remuneratory Benefit (SRB) is designed for extra
government's take from windfall profit which will
only be used if: |
|
| • |
all capital cost (plus special reduction)
are recovered, and |
| • |
annual revenue become drastically high compared
with the investment (i.e. unusual high oil
price) |
|
|
|
| Incentives |
Exemption
of any other corporate taxes, duties and taxes on
imported equipment and materials. |
| |
|
Markets
Pricing
|
Petroleum
produced can be sold for domestic consumption or
overseas. At present, natural gas is for domestic
use only due to ready market and sufficient infrastructure
at fair price. |
|
| |
|
| |
|
| |
Examples |
| |
|
| |
|
| |
|
| |
Factors
for SRB Calculation |
| |
|
Geological constant (K) |
150,000 |
meter |
|
Special reduction (SR) |
0 |
% |
|
Cumulative well depth
|
470,900 |
meter |
|
|
|
|
MMbaht |
% of revenue |
|
Revenue |
56,200 |
100.0 |
|
Cost |
28,300 |
50.4 |
|
Gross
Profit |
27,900 |
49.6 |
|
Royalty |
7,500 |
13.3 |
|
|
20,400 |
36.3 |
|
SRB |
200 |
0.4 |
|
|
20,200 |
35.9 |
|
Income
Tax |
10,100 |
17.9 |
|
Company Profit |
10,100 |
18.0 |
|
|
|
Company
profit
Gross Profit |
= 36.2% |
|
|
|
|
| |
|
| |
The Department of Mineral Resources has
re-evaluated the geological data, exploration and
production difficulty of exploration blocks in different
areas including the investment climate and competition in
the region and come up with more incentives for K and SR
values for the blocks open for bidding in the last three
and the present licensing rounds. |
| |
|
| |
|
|
