Ethiopia Upstream Fiscal and Regulatory Report - World Bank Review Recommends Policy Revisions, but Likelihood of Implementation Unclear

Ethiopia Upstream Fiscal and Regulatory Report - World Bank Review Recommends Policy Revisions, but Likelihood of Implementation Unclear

Summary

“Ethiopia Upstream Fiscal and Regulatory Report - World Bank Review Recommends Policy Revisions, but Likelihood of Implementation Unclear”, presents the essential information relating to the terms which govern investment into Ethiopia’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 Ethiopia’s upstream oil and gas investment climate.

Scope

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

Reasons to buy

- Understand the complex regulations and contractual requirements applicable to Ethiopia’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

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 5
4. Key Fiscal Terms 6
4.1. Royalties, Bonuses and Fees 6
4.1.1. Bonuses 6
4.1.2. Rental Fees 6
4.1.3. Training and Community DevelopmentContributions 6
4.1.4. Royalties 6
4.2. Cost Recovery 8
4.2.1. Limit on Recovery 8
4.2.2. Recoverable Costs 8
4.3. Profit Sharing 8
4.4. Direct Taxation 9
4.4.1. Petroleum Income Tax 9
4.4.2. Deductions and Depreciation 9
4.4.3. Withholding Tax 9
4.5. Indirect Taxation 10
4.5.1. Value Added Tax 10
4.5.2. Customs Duties 10
4.6. State Participation 10
4.7. Fiscal Stability Provisions 10
5. Regulation and Licensing 11
5.1. Legal Framework 11
5.1.1. Governing Law 11
5.1.2. Contract Type 11
5.1.3. Title to Hydrocarbons 11
5.2. Institutional Framework 12
5.2.1. Licensing Authority 12
5.2.2. Regulatory Agency 12
5.2.3. National Oil Company 12
5.3. Licensing Process 13
5.4. License Terms 13
5.4.1. Duration and Relinquishments 13
5.4.2. Work Obligations 13
5.5. Local Content 13
6. Outlook 14
7. Appendix 15
7.1. Contact Us 15
7.2. Disclaimer 15

List Of Tables

Table 1: Regime Overview 3
Table 2: Ethiopia, Typical Exploration Phase Rental Rates (US$/km2) 6
Table 3: Ethiopia, Liquids Royalty Rates (%), Blocks 2, 6, 7, 8 and Adigala 7
Table 4: Ethiopia, Gas Royalty Rates (%), Blocks 2, 6, 7, 8 and Adigala 7
Table 5: Ethiopia, State Share of Profit Oil - Liquids (%), Blocks 2, 6, 7, 8 and Adigala 8
Table 6: Ethiopia, State Share of Profit Oil - Gas (%), Blocks 2, 6, 7, 8 and Adigala 9

List Of Figures

Figure 1: Regime Flow Chart 4
Figure 2: Ethiopia, Indicative NPV10/boe, IRR and State Take Comparison, Regional 5
Figure 3: Ethiopia, Legal Framework 11
Figure 4: Ethiopia, Institutional Framework 12

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