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September 2012 1<br />
Italian Taxation System On<br />
Hydrocarbons’ Production: A<br />
Comparison<br />
Davide Tabarelli<br />
Eugenia Famiglietti<br />
NE Nomisma Energia<br />
Venice, September 11 2012
September 2012<br />
2<br />
Agenda<br />
Oil and gas taxation in Italy<br />
Example of taxation and barrel cost<br />
The different assumptions<br />
Potential increase in revenues for Italy<br />
Comparison of Italy with other countries<br />
Conclusions
September 2012 3<br />
Basic Concept<br />
Royalties: compensation to remunerate the rights<br />
transferred to third parties for the exploitation of a good<br />
Royalties are applied to the production value and are part of<br />
the broader fiscal withdrawal system.<br />
Simple comparison of is not possible<br />
Royalties, as taxes, are aimed at boosting economic activity<br />
and a better exploitation of mineral resources
The Italian Government Take<br />
Italian Taxation on E&P activities’ profits (% of net profits)<br />
September 2012 4
The Share of the Barrel Value<br />
Resources allocation between the State and private companies involved in the E&P<br />
sector concerning the recovery of owed costs and profits sharing<br />
September 2012 5
The Different Legal System<br />
Petroleum legal agreement<br />
September 2012 6
Main Differences<br />
Main differences between concessionary and contractual systems<br />
September 2012 7
Specific Taxation<br />
Evolution of the royalties regulatory framework in Italy<br />
September 2012 8
Rents, but limited impact<br />
Evolution of the rents regulatory framework in Italy<br />
September 2012 9
Italian long Lead Time<br />
Authorization timeframe<br />
September 2012 10
Uncertainty and postponement of investment<br />
Exploration and production activities and cash flow<br />
September 2012 11
Italian Unexploited Recourses
Potential Additional Royalties<br />
Revenues from royalties in Italy<br />
September 2012 13
Potential Additional Taxes<br />
Revenues from income taxes in Hydrocarbons activities<br />
September 2012 14
Total Additional Revenues<br />
Total State revenues on hydrocarbons activities<br />
September 2012 15
Example of Costs of a Barrel<br />
Distribution of the barrel value<br />
September 2012 16
Example for Italy: lower income for all<br />
Barrel value distribution<br />
September 2012 17
Comparison of Taxation<br />
International comparison between fiscal withdrawls on revenues deriving from E&P<br />
activities<br />
September 2012 18
Higher Efficiency, Higher Taxes, Higher Revenues<br />
Comparison of the relationship between average fiscal pressure on E&P activities and<br />
the 2010 European hydrocarbons production (mln.toe)<br />
September 2012 19
September 2012<br />
20<br />
Conclusions<br />
Royalties are not easy to compare<br />
It is necessary to compare the whole taxation<br />
Potential strong increase in revenues, profits and taxes<br />
Long lead time and uncertainties destroys revenues for all<br />
The comparison enphasise the high efficiciency of Norway<br />
The higher the efficiency the higher taxes
September 2012 21
Davide Tabarelli<br />
davide.tabarelli@nomismaenerg<br />
ia.it<br />
---------------------------------------------<br />
NE Nomisma Energia<br />
Via Montebello, 2<br />
40121 – Bologna (Italy)<br />
Tel. +39 051 19986550<br />
September Fax. +39 2012 051 19986580<br />
22
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