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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 EthiopiaReasons 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 Contents1 Table of Contents 11.1. List of Tables 21.2. List of Figures 22. Regime Overview 33. State Take Assessment 54. Key Fiscal Terms 64.1. Royalties, Bonuses and Fees 64.1.1. Bonuses 64.1.2. Rental Fees 64.1.3. Training and Community DevelopmentContributions 64.1.4. Royalties 64.2. Cost Recovery 84.2.1. Limit on Recovery 84.2.2. Recoverable Costs 84.3. Profit Sharing 84.4. Direct Taxation 94.4.1. Petroleum Income Tax 94.4.2. Deductions and Depreciation 94.4.3. Withholding Tax 94.5. Indirect Taxation 104.5.1. Value Added Tax 104.5.2. Customs Duties 104.6. State Participation 104.7. Fiscal Stability Provisions 105. Regulation and Licensing 115.1. Legal Framework 115.1.1. Governing Law 115.1.2. Contract Type 115.1.3. Title to Hydrocarbons 115.2. Institutional Framework 125.2.1. Licensing Authority 125.2.2. Regulatory Agency 125.2.3. National Oil Company 125.3. Licensing Process 135.4. License Terms 135.4.1. Duration and Relinquishments 135.4.2. Work Obligations 135.5. Local Content 136. Outlook 147. Appendix 157.1. Contact Us 157.2. Disclaimer 151.1 List of TablesTable 1: Regime Overview 3Table 2: Ethiopia, Typical Exploration Phase Rental Rates (US$/km2) 6Table 3: Ethiopia, Liquids Royalty Rates (%), Blocks 2, 6, 7, 8 and Adigala 7Table 4: Ethiopia, Gas Royalty Rates (%), Blocks 2, 6, 7, 8 and Adigala 7Table 5: Ethiopia, State Share of Profit Oil - Liquids (%), Blocks 2, 6, 7, 8 and Adigala 8Table 6: Ethiopia, State Share of Profit Oil - Gas (%), Blocks 2, 6, 7, 8 and Adigala 91.2 List of FiguresFigure 1: Regime Flow Chart 4Figure 2: Ethiopia, Indicative NPV10/boe, IRR and State Take Comparison, Regional 5Figure 3: Ethiopia, Legal Framework 11Figure 4: Ethiopia, Institutional Framework 12