Minerals Report - International Seabed Authority

Article 22 of the Presidential Decree number 2,705/98 presents a series
of tables with progressive indexes to be applied over the net revenue of the
production in the three-month period. These ones vary according to the
location of the concession (onshore, offshore up to 400 metres of water depth,
and offshore at waters deeper than 400 metres), and to the production time of
the concession.
The net revenue of the production over the three-month period must
be verified to each field, one by one, taking into account the production of oil
equivalent to the three-month period. Calculation of the net revenue of the
production in the three-month period starts from the gross revenue, of which
deductions are made as estimated in chapter IV of ANP Ordinance number
10/99, and including the addictions described in chapter VII of the same
regulation.
In the beginning of the production of an oil field, there may be
exemption of the payment of the special participation. The limits for
exemption, as established by the Presidential Decree number 2,705/98,
decrease from the start of the first year of production until the fourth year
following the start.
The first concession contracts were signed on August 6, 1998. In their
majority, these contracts referred to producing fields. In order to deal with
them, ANP Ordinance number 10/99 has a specific chapter – Chapter VIII –
that defines the type of appropriation of previous expenses.
A fourth kind of payment, which does not apply to offshore activities
and that is similar to the taxes, is the participation to be paid to landowners,
conceived in article 52 of the petroleum law. Such non-Governmental
participation is regulated by ANP Ordinance number 143/98. It is paid
following a taxation that varies from 0.5 % to 1 % over the production of oil
and natural gas, taking into consideration a calculation basis similar to the one
that is applied to royalties.
The beneficiary is the landowner in whose land the wellhead is
located. The volume of natural gas that is re-injected into the reservoir and
INTERNATIONAL SEABED AUTHORITY 829