The Merak Fiscal Model Library 2020.2 release includes the following fiscal updates to models.
Algeria RT (2019)
- This new model has been added to the library. Hydrocarbons Law No.19-13 revises the fiscal framework for hydrocarbons production and contains tax incentives aimed at encouraging more challenging types of exploration and production activity, including the development of small fields, and those with complex geology, as well as activity in underexplored regions.
- Under the new legislation, the tax burden on state-owned Sonatrach and its international partners will be cut from 85% to about 60% to 65%.
- The highlights of the model are
- Surface tax: Due annually and calculated on the basis of a fixed rate per km2 for each phase of the project
- Hydrocarbons royalty: Due on a monthly basis, and calculated at a rate of 10% of the production value
- Hydrocarbons revenue tax: Varies from 10% to 50%. The amount of the Hydrocarbon income tax, as applied for a given fiscal year (n), shall be determined on the basis of the factor (R) calculated using the ratio of cumulative net earnings to cumulative expenditure
- Income tax (tax on earnings): A 30% annual tax applied to the taxable income.
Canada Nova Scotia RT (2009)
- The model has been updated effective 1 April 2020. The provincial tax rate will decrease from 16% to 14%.
Mexico PSC (2014)
- Minimum Work Program (MWP) capital provision has been implemented in the model. It is part of the exploration capital. Only MWP is eligible for uplift for cost recovery and profit sharing.
- MWP is uplifted 0% for cost recovery, and 0% for profit sharing for bid round CNH-R01-L02/2015.
- MWP is uplifted 25% for cost recovery, and 300% for profit sharing for bid round CNH-R02-L01/2016.
- MWP is uplifted 25% for cost recovery, and 300% for profit sharing for bid round CNH-R03-L01/2017.
- A new cost recovery Limit has been set to 80% in the model for bid round CNH-R03-L01/2017.
Netherlands RT (2003)
- Surface rental fees has been updated for the exploration and production areas. Corporate income taxes has been set to 21.7% for 2021.
- Net Operating losses has been updated. Tax losses incurred in fiscal years starting on or after 1 January 2019 may be carried back for one year, and carried forward for six years.
Nigeria PSC (2005)
- The model has been updated with the Deep Offshore and Inland Basin PSC (Amendment) Act, 2019. The new royalty regime specifies a baseline royalty of 10% for crude oil, and condensates produced in the deep offshore (greater than 200 m water depth), and 7.5% for the Frontier and Inland Basin.
- In addition to the baseline royalty, an additional royalty based on the applicable price of crude oil, condensate, and natural gas will apply; but only when the price exceeds USD 20 per bbl.
Norway RT (1975)
- The model has been updated to incorporate the surface rental fees and the new CO2 tax rates for year 2018–2020.
Economic Indicator Addition
Point Forward AT ROR Indicator
- A Point Forward After-Tax Rate of Return (AT ROR) Indicator addition has been made in all the FML models of the library, which can be viewed in the “Economic Summary (Company)” report. Users can view the Point Forward AT ROR calculations based on the discount date set in the case.
FML Units Table Update
An update has been made to the FML units table where earlier “Density Degrees API” unit strings in metric units T/m3 is overridden with metric unit kg/m3.
Merak Fiscal Model Library, add-on library enhancements and fixes
A Point Forward AT ROR Indicator addition has been made in all the FML models of the library, which can be viewed in the “Economic Summary (Company)” report. User can view the point forward AT ROR calculations based on the discount date set in the case.