Minerals Report - International Seabed Authority

This tax must be paid up to January 15 of the year that follows the one
of the owed amount, according to what was verified.
The values to be paid are calculated in accordance to the phase of the
work (exploration, development, or production), taking into consideration the
geological characteristics, the location of the sedimentary basin where the
concession is situated, and other aspects. The tax varies between R$ 10,00 and
R$ 5.000,00 (approximately US$ 5.00 to US$ 2,500.00) per square kilometre.
The royalties derive from articles 47 and 49 of the petroleum law. The
criteria for their calculation and collection are determined in article 11 and in
the aforementioned Presidential Decree number 2,705. The incidence of
royalties varies between 5 % and 10 % over the total volume of the oil and
natural gas production multiplied by the reference price, with the exact fee
being set by each concession contract.
The definition of the total volume of production appears in clause XI
of article 3 of the Presidential Decree number 2,705/98. In general terms, one
may say the total volume of production is equivalent to the overall output,
deducting the volume of natural gas re-injected in the reservoir as well as the
volume of natural gas whose burning is authorised by ANP.
Payment of royalties must occur every month, until the last working
day of the month that follows the one whose production is under
consideration.
Another example of Governmental take on the withdrawal of the oil
and natural gas industry is the special participation, which is supported on
article 45 of the petroleum law, and specified in article 50 of the same law.
The long chapter VII of the Presidential Decree number 2,705/98 sets the
criteria for calculation and collection of the tax, whilst ANP Ordinance
number 10/99 introduces a formula for its verification. The verification must
be carried out every three months, in line with each three-month period of the
calendar year, with payment due until the last working day of the month that
follows the one of the verification.
INTERNATIONAL SEABED AUTHORITY 828