Merak Fiscal Model Library: Chile RSC (1996)

This document summarizes a fiscal model from Chile called the Chile RSC from 1996. Key details include that it is a risk service contract type fiscal regime where the state participates with 25% during exploration and 35% in the Magallanes basin. The contractor's remuneration is calculated based on monthly production and decreases as production levels increase. Production of gas is remunerated in US dollars at market price. The contractor is subject to a first category tax of 16.5-17% and can deduct losses indefinitely.

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Merak Fiscal Model Library: Chile RSC (1996)

Uploaded by

Libya Tripoli

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Download as PDF, TXT or read online on Scribd

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Merak Fiscal Model Library

A world-class collection of standardized fiscal models

Chile RSC (1996)

Fiscal Term Description
Fiscal Regime Type Risk Service Contract.
Governing Legislation Presidential Decree Law No. 1089 of 1975 (Model Special Operation Contract of 1996)
• ENAP participates with 25 % (not carried during the exploration phase)
State Participation
• 35 % for the Magallanes basin
Signature Bonus None.
Training Fee None.
Surface Rental None.
Royalty None.
• Liquid hydrocarbons are remunerated in kind. Remuneration is calculated based on
Contractor’s monthly production, number of fields and number of production days from fields
inside and outside the contract area.
Examples: Contractor Share (%)
MBOPD
1 2 3 4
0 to 5 85 75 72 60
5 to 15 74 75 63 56
Remuneration
15 to 30 72 70 63 56
30 to 60 65 65 60 54
60 to 100 58 60 55 50
> 100 58 60 55 40
• Production of gas is remunerated in US dollars with gas being valued at market price.
• Contractor share is 90 % if monthly value of gas production is above $ 100,000 / day

• Corporate First category tax: 16.5 % (for 2003) and 17.0 % for subsequent years.
• Depreciation:
Depreciation (SL)
Asset
(yrs)
Pre-production Investments 6
First Category Tax Pipelines 6
Construction 3
Tang Drilling 3
Intang Total Costs Expensed
• Accelerated depreciation may be applied to new fixed assets and to imported assets with
useful lives of 5 years or more. Negotiated on a contract basis.
• There is unlimited carry-forward of losses

April 2005 Page 1 of 2

Chile RSC (1996)

Fiscal Term Description

Withholding Tax Effective rate: 35 % (First Category Tax credited against this tax)
Value Added Tax Holders of petroleum rights are exempted from this tax
Ring Fencing For the Remuneration Fee calculation – not for taxes

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