The document discusses various fiscal systems for oil extraction between governments and oil companies. It covers concepts like royalties, cost recovery limits, profit oil splits, and government vs company take. Different systems like concession agreements, production sharing contracts, and R factor systems are examined in terms of how they divide revenues and allocate rents between landlord governments and tenant oil companies operating under contract.

50. Petroleum fiscal regimes Royalty / Tax system Contractual based system Service agreements Production sharing contracts Peruvian Indonesian Pure Hybrids Risk services

59. The R/T system flow Company share Government share Gross revenue $ 20 Royalty 12.5 % $ 2.50 Net revenue $17.50 Assumed costs $ 5.65 Deductions, like CAPEX & OPEX Taxable income $ 11.85 Special petroleum tax 25% $ 2.96 $ 8.89 $ 5.78 Income tax rate 35 % $ 3.11 $ 11.43 Division of gross revenues $ 8.57 $ 5.78 Division of cash flow $ 8.57 40 % Take 60 % 5.78 /($20-5.65) 8.57/ ($ 20-5.65)

63. R/T system cash flow summary Gross revenue 2,000,000 Total costs -565,000 Total profit 1,435,000 Bonus -5,000 Royalties 12.5% -250,000 SPT 25% -296,250 Income tax 35% -309,314 860,563 (GT) Company cash flow 574,438 Company take 40 % (574,438/1,435,000) Government take 60 % (860,563/1,435,000)

71. PSCs Contractor share Government share Gross revenue $ 20 Royalty 10% $ 2.00 $ 18.00 $ 5.65 assumed costs Cost recovery limit 50% $ 12.35 Profit Oil Profit oil split 40/60 $ 4.94 $ 7.41 ($ 1.48) Tax rate 30% $ 1.48 $ 3.46 $ 9.11 Division of Gross revenue $ 10.89 $ 3.46 Division of cash flow $ 10.89 24 % Take 76 % $ 3.46/ ($20-5.65) $ 10.89/ ($20-5.65)

78. Division of profits Take calculations Contents $ 100 Gross revenues -10 Royalty 90 Net Revenues -30 Cost recovery 60 Profit Oil -36 60 % to government 24 40 % to contractor -7.2 Corporate income tax 30 % 16.8 Contractor net income after tax

86. AGR calculations Take contents Contents 100 Gross revenues -10 Royalty 90 Net revenues -60 Cost recovery (limit = 60) 30 Profit Oil -18 60% to government 12 40% to contractor -0 Corporate income tax 30% 12 Contractor net income after tax

95. Take calculations; to summarize A 100% Gross revenues B -10% Royalty C 90% Net revenues D -35% Assumed costs E 55% Profit Oil F -33% Government P/O G 22% Company P/O H -11% Income tax (50%) I 11% Company cash flow 83% GT (B+F+H)/(A-D) 16.9% CT [I /(A-D)] 1.31% R factor [(D+I)/D] 57% Entitlement (D+G)