13 A Critical Intertemporal Analysis of Uganda’s Fiscal Regime …
413
will receive in any given accounting period for a field and the level of
frontloading of the fiscal terms.
The similar structure of the PSAs yielded relatively similar levels of
front-loading for the existing regimes. The 2012 EA1A PSA possesses a
higher MER due to the additional royalty imposed based on cumulative
production. The theoretical regime possesses the second-highest MER
due to the fact that it possesses a higher initial profit-sharing threshold
of 50% compared to 45 and 46% of the EA1 2004 and EA3A 2004
respectively.
13.4.2.2 Amount of Government Revenues
With a price assumption of US $60 FOB Mombasa, real dollar 2016,
the Buliisa project yielded a pre-tax IRR of 29.6% because of the high
production volumes and the lower development and operating costs per
barrel. Under similar assumptions, the KF-KT project yielded a pre-tax
IRR of 26.5% and is less profitable than Buliisa. Both projects possess
considerable revenue-raising ability for the GoU subject to the oil price
realized. Table 13.3 summarizes the main economic results from the
analysis of the two projects across all the regimes evaluated.
Under the Buliisa project, the EA1A 2012 PSA generated the highest
government take of US $14.1 Billion discounted at 10%. This was due to
the interaction of the fiscal terms and the additional layer of royalty based
on cumulative production prevalent in the EA1A PSA. All the existing
PSAs were cited for outperforming the theoretical R-factor terms from
the Government perspective with the EA3A 2004 PSA raising US $13.7
Billion, the EA1 2004 PSA raising US $13.6 Billion and the theoretical
terms raising US $13.1 Billion. The limited difference in performance
was explained by a similar general structure of the terms and the reducing
level of the effective royalty rates in the order of the fiscal term performance. This implies that the negotiation of the fiscal terms improved
over time, probably as more information on the geological attributes and
capacity developed.
Considering KF-KT development, the results were reversed. The theoretical R-factor regime raised the highest Government revenue of US
413
will receive in any given accounting period for a field and the level of
frontloading of the fiscal terms.
The similar structure of the PSAs yielded relatively similar levels of
front-loading for the existing regimes. The 2012 EA1A PSA possesses a
higher MER due to the additional royalty imposed based on cumulative
production. The theoretical regime possesses the second-highest MER
due to the fact that it possesses a higher initial profit-sharing threshold
of 50% compared to 45 and 46% of the EA1 2004 and EA3A 2004
respectively.
13.4.2.2 Amount of Government Revenues
With a price assumption of US $60 FOB Mombasa, real dollar 2016,
the Buliisa project yielded a pre-tax IRR of 29.6% because of the high
production volumes and the lower development and operating costs per
barrel. Under similar assumptions, the KF-KT project yielded a pre-tax
IRR of 26.5% and is less profitable than Buliisa. Both projects possess
considerable revenue-raising ability for the GoU subject to the oil price
realized. Table 13.3 summarizes the main economic results from the
analysis of the two projects across all the regimes evaluated.
Under the Buliisa project, the EA1A 2012 PSA generated the highest
government take of US $14.1 Billion discounted at 10%. This was due to
the interaction of the fiscal terms and the additional layer of royalty based
on cumulative production prevalent in the EA1A PSA. All the existing
PSAs were cited for outperforming the theoretical R-factor terms from
the Government perspective with the EA3A 2004 PSA raising US $13.7
Billion, the EA1 2004 PSA raising US $13.6 Billion and the theoretical
terms raising US $13.1 Billion. The limited difference in performance
was explained by a similar general structure of the terms and the reducing
level of the effective royalty rates in the order of the fiscal term performance. This implies that the negotiation of the fiscal terms improved
over time, probably as more information on the geological attributes and
capacity developed.
Considering KF-KT development, the results were reversed. The theoretical R-factor regime raised the highest Government revenue of US