Resource rents will be distributed among the state and the oil companies engaged in extracting hydrocarbons in a license.
[4] Signature bonus is a onetime fee for the assignment and securing of a license, paid irrespective of economic success for the contractor or licensee.
This arrangement applies to both crude oil and to natural gas, both in concessionary and contractual license systems.
Other countries enjoying surface fee include Algeria, Angola, Benin, Cameroon, Mauritania.
A 'ring fence' prevents taxable profits from being reduced by losses that the oil company experiences from other activities.
[9] According to Norwegian fiscal regime, a CO2 tax is paid per volume liquids and gas burnt or emitted directly to air on the continental shelf.
[11] The principle of the concessionary license system is that the state transfers its ownership of resources in the subsurface to a commercial entity, often a partnership of companies.
The companies obtain exclusive rights to extract crude oil and natural gas in a defined area for a limited time.
If more than one company are assigned a license, the government will provide a joint operating agreement which states each partners equity share.
One of the companies is often assigned the operator role, who carry out the actual work on behalf of the group.