US OCS Upstream Fiscal and Regulatory Report - Favorable Fiscal Terms but Strong State and Judicial Opposition to Expanding the OCS on Offer
Summary
The Unites States offers regular licensing rounds paired with favorable fiscal and stable regulatory terms, which score well for licensees when compared with neighboring countries’ petroleum fiscal frameworks. However, the administration’s decision of halting the opening up to hydrocarbons exploration of practically all parts of the OCS as a result of strong political and judicial opposition leaves the schedule of the lease sales based on the 2017-2022 program. The result will be slowing investments pace as initially planned when the administration introduced the draft program 2019-2024. Whether or not additional OCS areas are opened, the Gulf of Mexico is likely to continue to contribute the bulk of licensing activity. The administration has recently reduced its fiscal take favoring investors, but few significant further changes appear on the horizon.
“US OCS Upstream Fiscal and Regulatory Report - Favorable Fiscal Terms but Strong State and Judicial Opposition to Expanding the OCS on Offer”, presents the essential information relating to the terms which govern investment into United States’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 United States’s upstream oil and gas investment climate.
Scope
Reasons to Buy
Summary
The Unites States offers regular licensing rounds paired with favorable fiscal and stable regulatory terms, which score well for licensees when compared with neighboring countries’ petroleum fiscal frameworks. However, the administration’s decision of halting the opening up to hydrocarbons exploration of practically all parts of the OCS as a result of strong political and judicial opposition leaves the schedule of the lease sales based on the 2017-2022 program. The result will be slowing investments pace as initially planned when the administration introduced the draft program 2019-2024. Whether or not additional OCS areas are opened, the Gulf of Mexico is likely to continue to contribute the bulk of licensing activity. The administration has recently reduced its fiscal take favoring investors, but few significant further changes appear on the horizon.
“US OCS Upstream Fiscal and Regulatory Report - Favorable Fiscal Terms but Strong State and Judicial Opposition to Expanding the OCS on Offer”, presents the essential information relating to the terms which govern investment into United States’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 United States’s upstream oil and gas investment climate.
Scope
- Overview of current fiscal terms governing upstream oil and gas operations in United States
- 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 United States.
Reasons to Buy
- Understand the complex regulations and contractual requirements applicable to United States’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.
Table of Contents
1.1. List of Tables1.2. List of Figures
2. Regime Overview
3. State Take Assessment
4. Key Fiscal Terms
4.1. Royalties, Bonuses and Fees
4.1.1. Bonus
4.1.2. Rental
4.1.3. Royalty
4.2. Direct Taxation
4.2.1. Federal Corporate Income Tax
4.2.2. Federal Corporate Income Tax Deductions and Depreciation
4.2.3. Withholding Tax
4.3. Branch Profits Tax
4.4. Indirect Taxation
4.4.1. Value Added Tax
4.4.2. Custom Duties
4.4.3. Depletion Allowance
4.4.4. Carbon Credit for Enhanced Oil Recovery
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
5.3. Licensing Process
5.3.1. Licensing Rounds
5.3.2. Pre-qualification
5.3.3. Bidding
5.4. License Terms
5.4.1. Duration and Relinquishments
5.4.2. Activity Plan
5.5. Local Content
6. Outlook
7. Appendix
7.1. Bibliography
7.2. Contact Us
7.3. Disclaimer
1.1 List of Tables
Table 1: Regime Overview
Table 2: US OCS, Average Bonus Per Acre in Recent Lease Sale (US$)
Table 3: US OCS, Gulf of Mexico Rental Rates (US$ per acre)
Table 4: US OCS, Gulf of Mexico Rental Program R1, R2, R3, R4, R5 and R6 (US$ per acre)
Table 5: US OCS, Gulf of Mexico Royalty Rates (%)
Table 6: US OCS, Gulf of Mexico Deepwater Royalty Relief Volumes (mmboe)
Table 7: US OCS, Gulf of Mexico Deepwater Royalty Relief Threshold Prices
Table 8: US OCS, Gulf of Mexico Shallow Water Deep Gas Royalty Relief Volumes (bcf)
Table 9: US OCS, Gulf of Mexico Shallow Water Deep Gas Royalty Relief Threshold Gas Prices (US$/mcf)
Table 10: US OCS, Alaska Suspension Volume (mmbbl)
Table 11: US, Historical Marginal Federal Corporate Income Tax Rates to 2017 (%)
Table 12: US - Alaska, 7-Year & 5-Year GDS Depreciation Rates (Half-Year Convention) (%)
Table 13: US, Depreciation of assets
Table 14: US, Bonus Depreciation Rates
Table 15: US OCS, Gulf of Mexico, Initial Period (years)
Table 16: References
1.2 List of Figures
Figure 1: Regime Flow Chart
Figure 2: US OCS, Indicative NPV10/boe, IRR and State Take Comparison, Regional
Figure 3: US OCS, Legal Framework
Figure 4: US OCS, Institutional Framework
