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Summary"United Kingdom Upstream Fiscal and Regulatory Report - Autumn Budget 2017 Introduces Transferable Tax History for Late-life Assets", presents the essential information relating to the terms which govern investment into United Kingdom'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 Kingdom's upstream oil and gas investment climate.Scope- Overview of current fiscal terms governing upstream oil and gas operations in United Kingdom- 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 KingdomReasons to buy- Understand the complex regulations and contractual requirements applicable to United Kingdom'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 31.2. List of Figures 32. Regime Overview 43. State Take Assessment 74. Key Fiscal Terms 84.1. Upfront Payments 84.1.1. Rentals 84.1.2. Royalties (Abolished January 1, 2003) 104.1.3. Royalties - Onshore Northern Ireland 104.2. Petroleum Revenue Tax 104.2.1. Application of Petroleum Revenue Tax 104.2.2. Supplement 104.2.3. Oil Allowance 114.2.4. Tariff Receipts Allowance 114.2.5. Cross-Field Allowance 114.2.6. Safeguard 114.2.7. Provisional Expenditure Allowance (Abolished from July 1, 2009) 124.3. Corporation Tax 124.3.1. Ring Fence Corporation Tax 124.3.2. General Corporation Tax 134.3.3. Deductions and Depreciation 134.3.4. Mineral Extraction Allowance 144.3.5. Ring Fence Expenditure Supplement 144.4. Supplementary Charge 144.4.1. Application of Supplementary Charge 144.4.2. Investment Allowance 154.4.3. Cluster Allowance 164.4.4. Onshore Allowance 164.4.5. Previous Field Allowances 164.5. EU Emissions Trading Scheme 184.6. Customs Duties 184.7. Value Added Tax 185. Regulation and Licensing 195.1. Legal Framework 195.1.1. Governing Law 195.1.2. Contract Type 205.1.3. Title to Hydrocarbons 205.2. Institutional Framework 215.2.1. Licensing Authority 215.2.2. Regulatory Agency 215.3. Licensing Process 225.3.1. Licensing Rounds 225.3.2. Out-of-Round Applications 225.3.3. Applicant Requirements 225.3.4. Work Program Proposals 235.3.5. Application Fee 235.3.6. Application Assessment 235.4. License Terms 245.4.1. Duration 245.4.2. Relinquishments 255.5. Restrictions on Hydraulic Fracturing 256. Outlook 267. Appendix 287.1. Contact Us 287.2. Disclaimer 281.1 List of TablesTable 1: Regime Overview 4Table 2: United Kingdom, “Innovate” Seaward License Rentals (£/km2), 2017 and 2016 8Table 3: United Kingdom, License Rentals (£/km2), Pre-2016 Licenses 9Table 4: United Kingdom, Ring Fence Corporation Tax Rates (%), 1975-2017 12Table 5: United Kingdom, Corporation Tax (Main Rate), 2000-2016 13Table 6: United Kingdom, Supplementary Charge, 2002-2016 15Table 7: United Kingdom, Current Licenses, License Duration (years) 24Table 8: United Kingdom, Previous Licenses, License Duration (years) 24Table 9: United Kingdom, Relinquishment Requirements, Pre-2016 Licenses 251.2 List of FiguresFigure 1: Regime Flow Chart - UK (excluding onshore Northern Ireland) 5Figure 2: Regime Flow Chart - Onshore Northern Ireland 6Figure 3: United Kingdom,Indicative NPV10/boe, IRR, and State Take Comparison - Regional Peers, 2017 7Figure 4: United Kingdom, Legal Framework 19Figure 5: United Kingdom, Institutional Framework 21