Merak Fiscal Model Library
A world-class collection of standardized fiscal models
Cameroon Rente Miniere (1995)
Fiscal Term Description
Fiscal Regime Type Royalty/Tax.
Governing Legislation Mining Code of the law of 6 April 1964
• During exploration, SNH holds a 50% carried interest in all Costs and a 60% interest in
Production. Upon start of production, SNH maintains a 50% working interest in all Costs and a
sliding scale interest in Production, based upon cumulative production, according to the
following table:
Cumulative NOC Revenue
Production Interest
(MMBOE) (%)
> 100 60
100 - 200 65
>200 70
State Participation • SNH repays costs from a sliding scale % of revenue available for payback, based on cumulative
production, according to the following table:
Cumulative Revenue
Production Available for
(MMBOE) NOC Payback
(%)
> 100 30
100 - 200 35
>200 40
• Interest may be applied to the carried cost balance at a negotiable rate (a rate of 8% is
assumed here).
Signature Bonus Negotiable.
Training Fee Negotiable.
Hydrocarbon Support Fund Contractor pays $0.20 per barrel.
Surface Rental Negotiable.
Production Bonus Is negotiable, the following table shows sample rates.
Average Bonus
Production Rate (M$)
Production Bonus (Bbl/d)
> 20,000 900
> 50,000 1,350
> 100,000 1,350
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Cameroon Rente Miniere (1995)
Fiscal Term Description
The Contractor Guaranteed share of Rente Miniere (RMG) depends on the project R-Factor and
can be either Pre-tax or Post-tax, as follows:
Contractor Share (%)
R Factor Pre-tax Post-tax
< 1.5 42.84% 22%
1.5 – 2 50.63% 26%
Rente Miniere (Mining >2 58.42% 30%
Rente)
• Rente Miniere is defined as Gross Revenue less Technical Costs (Operating Costs, Capital
Depreciation and Capital Costs).
• Technical Costs do not include Income Taxes, Hydrocarbon Support Fund, and other bonuses
and fees.
• Exploration Capital is expensed, Development dry holes are amortized over 2 years, all other
capital is amortized over 5 years.
Swings to ensure that Contractor receives pre-defined guaranteed share of Project Rente Miniere.
This means that Royalty can be either positive or negative in any given year. The formula for
Royalty Royalty (assuming After-Tax RMG) is as follows:
Royalty = Contractor Rente Miniere - AT RMG / (1-Tax Rate).
The general tax rate is 57.5%. For US Companies, a tax rate of 48.65% for those who are
Income Tax remitting dividends is applicable. A rate of 48.65% is assumed here.
• Depreciation for Income Tax is the same as for Rente Miniere
Withholding Tax None.
• Around the Block for recovery of Exploration Costs.
Ring Fencing
• Around the Development Field for recovery of development costs and operating cost.
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April 2005 Page 2 of 2
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