Summary
The creation of Lebanon’s petroleum fiscal framework has been completed, at least for offshore Lebanon, over the course of the past ten years. As the country progresses to its second offshore round, it appears that the fiscal regime will remain relatively stable. However, new regulations are planned in the coming years, including those concerning onshore activities and the creation of a sovereign wealth fund (SWF). Potential policy risks for the sector may arise in the future if oil or gas discoveries are made, especially along the Israeli-Lebanese contested border. On top of this, at the regional level, in relation to petroleum activities, Lebanon appears presently quite isolated as for the current discussions among some European and Middle Eastern and North African countries in relation to future commercial deals and exporting routes for hydrocarbons.
“Lebanon Upstream Fiscal and Regulatory Report - Stable Fiscal Regime Planned for Second Offshore Round”, presents the essential information relating to the terms which govern investment into Lebanon’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 Lebanon’s upstream oil and gas investment climate.
Scope
- Overview of current fiscal terms governing upstream oil and gas operations in Lebanon
- 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 Lebanon.
Reasons to buy
- Understand the complex regulations and contractual requirements applicable to Lebanon’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
1.1. List of Tables
1.2. List of Figures
2. Regime Overview
3. State Take Assessment
4. Key Fiscal Terms
4.1. Royalties, Bonuses and Fees
4.1.1. Royalty
4.1.2. Rental Fee
4.1.3. Training Obligation
4.2. Cost Recovery
4.2.1. Limit on Recovery
4.2.2. Recoverable Costs
4.3. Profit Sharing
4.4. Direct Taxation
4.4.1. Corporate Income Tax (CIT)
4.4.2. Deduction and Depreciation
4.4.3. Branch Remittance Tax
4.4.4. Withholding Tax
4.4.5. Capital Gains Tax
4.5. Indirect Taxation
4.5.1. Value Added Tax
4.5.2. Customs Duties
4.5.3. Stamp Duty
4.6. Abandonment Fund
4.7. Fiscal Stability
5. Regulation and Licensing
5.1. Legal Framework
5.1.1. Governing Law
5.1.2. Contract Type
5.1.3. Title to Hydrocarbons
5.2. Institutional Framework
5.2.1. Licensing Authority
5.2.2. Regulatory Agency
5.2.3. National Oil Company
5.3. Licensing Process
5.3.1. Licensing Rounds
5.3.2. Prequalification
5.3.3. Bidding
5.4. License Terms
5.4.1. Duration and Relinquishments
5.4.2. Participation
5.4.3. Work Obligation
5.4.4. Domestic Market Obligation
5.5. Local Content
6. Outlook
7. Appendix
7.1. References
7.2. Contact Us
7.3. Disclaimer
1.1 List of Tables
Table 1: Regime Overview
Table 2: Lebanon, Liquids Royalties (%)
Table 3: Lebanon, Profit Sharing Mechanism (%)
Table 4: Lebanon, Final Profit Sharing Terms, First Licensing Round
Table 5: Lebanon, Depreciation Rates (%)
Table 6: Lebanon, Eligibility Criteria for Pre-Qualification, Second Licensing Round
Table 7: Lebanon, Technical and Commercial Proposal Marking, First Licensing Round
Table 8: References
1.2 List of Figures
Figure 1: Regime Flow Chart
Figure 2: Lebanon, Indicative NPV10/boe, IRR and State Take Comparison, Regional
Figure 3: Lebanon, Legal Framework
Figure 4: Lebanon, Institutional Framework
