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Kenya Upstream Fiscal and Regulatory Guide

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Details

Kenya Upstream Fiscal and Regulatory Guide

Summary

Kenya offers production sharing agreements for upstream petroleum operations. In 2019, the government introduced new legislation governing the sector, which includes the introduction of a profitability-based profit sharing mechanism and also shifts the tax liability on to licensees for new contracts signed. Previously the state paid licensee's tax obligations through its share of profit oil. Further amendments to the framework including changes to the Income Tax Act are planned in the short term and following this, a licensing round is planned 2021.

Kenya Upstream Fiscal and Regulatory Guide, presents the essential information relating to the terms which govern investment into Kenya'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 Kenya's upstream oil and gas investment climate.

Scope

- Overview of current fiscal terms governing upstream oil and gas operations in Kenya

- 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 Kenya

Reasons to buy

- Understand the complex regulations and contractual requirements applicable to Kenya'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

READ MORE

Table Of Content

Scope

Table of Contents

1.1. List of Tables

1.2. List of Figures

2. Executive Summary

2.1. Regime Overview - Production Sharing Agreement

2.2. Timeline

2.3. State Take Assessment

3. Key Terms - Production Sharing Agreements

3.1. Bonuses and Fees

3.1.1. Signature Bonus

3.1.2. Surface Fees

3.1.3. Training Fee

3.2. Cost Recovery

3.2.1. Limit on Recovery

3.2.2. Uplift

3.2.3. Recoverable Costs

3.2.4. Non-Recoverable Costs

3.3. Profit Sharing

3.3.1. 2019 Model

3.3.2. Pre-2019 Contracts

3.4. Windfall Tax (2008-2018 Contracts)

3.5. Abandonment Fund

3.6. Direct Taxation

3.6.1. Corporate Income Tax

3.6.2. Deductions and Depreciation

3.6.3. Capital Gains Tax

3.6.4. Withholding Tax

3.7. Indirect Taxation

3.7.1. Value Added Tax

3.7.2. Customs Duties

3.8. State Participation

3.9. Marginal and Sub-Commercial Discoveries

3.10. Natural Gas Discoveries

3.11. License Terms

3.11.1. Duration and Relinquishments

3.11.2. Work Obligation

3.12. Domestic Market Obligation

4. Regulation and Licensing

4.1. Legal Framework

4.1.1. Governing Law

4.1.2. Contract Type

4.1.3. Title to Hydrocarbons

4.2. Institutional Framework

4.2.1. Licensing Authority

4.2.2. Regulatory Agency

4.2.3. National Oil Company

4.3. Licensing Process

4.3.1. Licensing Rounds

4.3.2. Bidding

4.4. Local Content

5. Appendix

5.1. References

5.2. Contact Us

5.3. Disclaimer


List Of Figure

List of Figures

Figure 1: Regime Flow Chart - Production Sharing Agreements

Figure 2: Kenya, Indicative NPV10/boe, IRR and State Take Comparison, and Price and Cost Sensitivity Analysis

Figure 3: Kenya, Legal Framework

Figure 4: Kenya, Institutional Framework


List Of Table

List of Tables

Table 1: Regime Overview

Table 2: Kenya, Key Events since 2000

Table 3: Kenya, PSA, Signature Bonus Payments From Selected PSAs (USD )

Table 4: Kenya, PSA, Surface Fees From Selected PSAs (USD /km)

Table 5: Kenya, PSA, Annual Training Fees From Selected PSAs (USD )

Table 6: Kenya, PSA, R-Factor Profit Petroleum Split, 2019

Table 7: Kenya, PSA, Incremental Profit Sharing Split, Blocks 11A and L16, 2012

Table 8: Kenya, PSA, Incremental Profit Sharing Split, Blocks L27 and L28, 2012

Table 9: Kenya, PSA, Incremental Profit Sharing Split, Block 2B, 2008

Table 10: Kenya, PSA, Incremental Profit Sharing Split, Block 1, 2007

Table 11: Kenya, PSA, Government Participation From Selected PSAs (%)

Table 12: Kenya, PSA, License Duration Examples (Years)

Table 13: Kenya, PSA, Work and Minimum Expenditure Obligations From Selected Contracts

Table 14: References

Licence Rights

Single User License:
Report can be used by individual purchaser only

Site License:
Report can be shared by unlimited users within one corporate location, e.g. a regional office

Corporate User License: 
Report can be shared globally by unlimited users within the purchasing corporation e.g. all employees of a single company

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Company Profile

Company Profile Title

Kenya Upstream Fiscal and Regulatory Guide

Summary

Kenya offers production sharing agreements for upstream petroleum operations. In 2019, the government introduced new legislation governing the sector, which includes the introduction of a profitability-based profit sharing mechanism and also shifts the tax liability on to licensees for new contracts signed. Previously the state paid licensee's tax obligations through its share of profit oil. Further amendments to the framework including changes to the Income Tax Act are planned in the short term and following this, a licensing round is planned 2021.

Kenya Upstream Fiscal and Regulatory Guide, presents the essential information relating to the terms which govern investment into Kenya'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 Kenya's upstream oil and gas investment climate.

Scope

- Overview of current fiscal terms governing upstream oil and gas operations in Kenya

- 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 Kenya

Reasons to buy

- Understand the complex regulations and contractual requirements applicable to Kenya'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

READ MORE

Scope

Table of Contents

1.1. List of Tables

1.2. List of Figures

2. Executive Summary

2.1. Regime Overview - Production Sharing Agreement

2.2. Timeline

2.3. State Take Assessment

3. Key Terms - Production Sharing Agreements

3.1. Bonuses and Fees

3.1.1. Signature Bonus

3.1.2. Surface Fees

3.1.3. Training Fee

3.2. Cost Recovery

3.2.1. Limit on Recovery

3.2.2. Uplift

3.2.3. Recoverable Costs

3.2.4. Non-Recoverable Costs

3.3. Profit Sharing

3.3.1. 2019 Model

3.3.2. Pre-2019 Contracts

3.4. Windfall Tax (2008-2018 Contracts)

3.5. Abandonment Fund

3.6. Direct Taxation

3.6.1. Corporate Income Tax

3.6.2. Deductions and Depreciation

3.6.3. Capital Gains Tax

3.6.4. Withholding Tax

3.7. Indirect Taxation

3.7.1. Value Added Tax

3.7.2. Customs Duties

3.8. State Participation

3.9. Marginal and Sub-Commercial Discoveries

3.10. Natural Gas Discoveries

3.11. License Terms

3.11.1. Duration and Relinquishments

3.11.2. Work Obligation

3.12. Domestic Market Obligation

4. Regulation and Licensing

4.1. Legal Framework

4.1.1. Governing Law

4.1.2. Contract Type

4.1.3. Title to Hydrocarbons

4.2. Institutional Framework

4.2.1. Licensing Authority

4.2.2. Regulatory Agency

4.2.3. National Oil Company

4.3. Licensing Process

4.3.1. Licensing Rounds

4.3.2. Bidding

4.4. Local Content

5. Appendix

5.1. References

5.2. Contact Us

5.3. Disclaimer


List Of Figure

List of Figures

Figure 1: Regime Flow Chart - Production Sharing Agreements

Figure 2: Kenya, Indicative NPV10/boe, IRR and State Take Comparison, and Price and Cost Sensitivity Analysis

Figure 3: Kenya, Legal Framework

Figure 4: Kenya, Institutional Framework


List Of Table

List of Tables

Table 1: Regime Overview

Table 2: Kenya, Key Events since 2000

Table 3: Kenya, PSA, Signature Bonus Payments From Selected PSAs (USD )

Table 4: Kenya, PSA, Surface Fees From Selected PSAs (USD /km)

Table 5: Kenya, PSA, Annual Training Fees From Selected PSAs (USD )

Table 6: Kenya, PSA, R-Factor Profit Petroleum Split, 2019

Table 7: Kenya, PSA, Incremental Profit Sharing Split, Blocks 11A and L16, 2012

Table 8: Kenya, PSA, Incremental Profit Sharing Split, Blocks L27 and L28, 2012

Table 9: Kenya, PSA, Incremental Profit Sharing Split, Block 2B, 2008

Table 10: Kenya, PSA, Incremental Profit Sharing Split, Block 1, 2007

Table 11: Kenya, PSA, Government Participation From Selected PSAs (%)

Table 12: Kenya, PSA, License Duration Examples (Years)

Table 13: Kenya, PSA, Work and Minimum Expenditure Obligations From Selected Contracts

Table 14: References

Single User License:
Report can be used by individual purchaser only

Site License:
Report can be shared by unlimited users within one corporate location, e.g. a regional office

Corporate User License: 
Report can be shared globally by unlimited users within the purchasing corporation e.g. all employees of a single company

To know more information on Purchase by Section, please send a mail to support@kenresearch.com

INQUIRE FOR COVID-19 IMPACT ANALYSIS