--- oa_review_kit: v1 guide_slug: oil-gas-extractives guide_version: oil-gas-extractives@2026-05-23T06:31:37.677Z archetype: other --- # Review kit: Oil Gas Extractives Thank you for reviewing this Guide. This kit is one file with three parts: how to use it, an interview prompt for your AI, and the Guide itself. ## How to use this kit (3 steps, about 15 minutes) 1. Open the AI you already use (ChatGPT, Claude, Gemini, anything that reads markdown) and paste in everything from "INTERVIEW PROMPT" below, including the Guide at the end. 2. Your AI interviews you like a colleague, one question at a time. Just talk: war stories, walk-throughs, the mistakes you catch. No writing required. 3. Your AI writes your answers up as a single markdown file. Hand it back at openaccountants.com/skills/oil-gas-extractives/handback (also linked from the Guide page: "Hand back your file"). What you added is published under your name and credential. If your AI cannot produce the exact output format, hand back whatever you have: a revised Guide file, a worksheet, or plain notes. We take those too, and a person reviews them by hand. The format below is the one we can apply straight away. --- # INTERVIEW PROMPT (paste from here down into your AI) You are interviewing a practising accountant about how they actually do the work covered by the attached Guide ("Oil Gas Extractives", slug `oil-gas-extractives`). Interview them like a colleague doing a handover. Do not lecture. Ask ONE question at a time and wait for the answer. Chase war stories and specifics: what kind of client, which portal step, how big the penalty was. The rates, thresholds, and citations are our job; we refresh those from primary sources. Capture ONLY what is NOT derivable from law: - order of operations, and what a wrong order corrupts - what to ask a client before computing anything - what to assume when a fact is unknown, and how it gets flagged - the most-missed traps, with penalty size and who falls in - how the portal or filing channel actually behaves - what has to reconcile before anyone signs - when to refuse the work and hand it to a human specialist If the accountant corrects a rate, threshold, or deadline in the Guide along the way, record it in the FACT CORRECTIONS table, but do not steer the interview toward numbers. ## Questions to work through Ask these in order, one at a time. Skip any the accountant has already covered; follow up where a story has specifics worth pinning down. Each question is tagged with the method slot(s) it feeds. 1. [sequence] Walk me through the last one of these you did for a real client, start to finish. What did you open first, and why that order? 2. [intake_questions] A new client sits down for this work. What are your first five questions before you touch a number? 3. [evidence] Which documents do you insist on seeing, and which do you take the client's word for? 4. [trap] When you review this work drafted by someone else, what mistake do you catch most often? 5. [conservative_default] When a key fact is unknowable at draft time, what do you assume, and how do you flag it? 6. [judgment_rule] When the law allows two routes, how do you actually pick, and what do you write down about the choice? 7. [cross_check] Before you sign, what has to reconcile with what, and how close is close enough? 8. [filing_mechanics] Walk me through the actual submission: the portal steps, the order things must happen in, what locks, what you can't undo. 9. [scope_gate] Which clients do you refuse or refer to a specialist for this work? What makes you stop? 10. [unsettled_law] Anything here you deliberately won't finalise right now because the rules are moving? 11. [handback_protocol] What exactly do you hand over at the end? What's in your working paper? ## Method slots (for tagging the write-up) - `scope_gate` (Scope gate and refusals): when to stop and send the client to a human - `sequence` (Order of operations): what order to do things in, and what a wrong order corrupts - `intake_questions` (Client intake questions): what to ask a client before computing - `evidence` (Documents and evidence): which documents to insist on, and what is draft-grade vs file-grade - `judgment_rule` (Judgment rules): how a practitioner actually picks when the law allows two routes - `conservative_default` (Conservative defaults): what to assume when a fact is unknowable at draft time - `trap` (Traps and most-missed items): the mistakes everyone makes, what they cost, and who falls in - `filing_mechanics` (Portal and filing mechanics): how submission actually works: channel, order, what locks - `cross_check` (Cross-checks before signing): what has to reconcile with what before delivery, and how close is close enough - `pattern_library` (Pattern library): how messy real-world data (bank lines, payout platforms) maps to tax categories - `edge_case` (Edge-case playbook): the client situations that change the method, not just the numbers - `unsettled_law` (Unsettled-law flags): what not to finalise right now, and why - `handback_protocol` (Hand-back protocol): what the finished working paper contains and who reviews it ## Output format: oa-handback v1 When the interview is done, write the answers up as ONE markdown file in exactly this shape. Fill in the reviewer's real name, credential, and email (ask for them at the end if they have not come up). Every method block gets a `### [method:]` heading where `` is one of the 13 slot ids above. Keep `guide_slug` and `guide_version` exactly as given. Omit any section the interview produced nothing for, but keep the headings that remain exactly as shown. The `fact_key` column may be left blank when unknown. ```markdown --- oa_handback: v1 guide_slug: oil-gas-extractives guide_version: oil-gas-extractives@2026-05-23T06:31:37.677Z reviewer_name: reviewer_credential: # free text: CPA, EA, ACCA, Steuerberater... reviewer_email: verdict: --- ## METHOD ### [method:filing_mechanics] ### [method:intake_questions] - - ... ## FACT CORRECTIONS | fact_key | current | correct | source | |---|---|---|---| | | | | | ## FLAGS - [unsettled] - [refer] ## NOTES ``` If for any reason you cannot produce this exact format, output the accountant's corrections and methods as clear plain notes instead. The hand-back page accepts plain notes and revised Guide files too; this format is an optimization, never a gate. --- # THE GUIDE UNDER REVIEW --- name: oil-gas-extractives description: "Use this skill whenever a producer, refiner, miner, oilfield services company, midstream operator, or LNG developer asks about sector-specific tax and accounting. Trigger on phrases like \"petroleum revenue tax\", \"PRT\", \"ring-fence corporation tax\", \"RFCT\", \"supplementary charge\", \"energy profits levy\", \"EPL\", \"OBPS\", \"carbon levy\", \"EU Solidarity Contribution\", \"windfall tax energy\", \"Norwegian special tax\", \"petroleum tax\", \"production sharing contract\", \"PSC\", \"concession\", \"royalty\", \"ad valorem royalty\", \"severance tax\", \"depletion allowance\", \"intangible drilling costs\", \"IDC\", \"successful efforts vs full cost\", \"decommissioning ARO\", \"EITI\", \"extractive industries transparency initiative\", \"country-by-country resource payments\", \"mining royalty\", or any question on extractives. Maps petroleum and mining fiscal regimes for 25+ jurisdictions plus the windfall taxes introduced 2022-2025. Does NOT cover: HSE / safety regulation, environmental remediation procedure beyond tax accounting, oil & gas reserves estimation methodology (PRMS)." jurisdiction: GLOBAL tax_year: 2025 --- # oil-gas-extractives ## What this file is A sector overlay for oil & gas, mining, and other extractives companies. ## Section 1 — Fiscal regimes overview **[T1] Three main regime models** _(Section 1 — Fiscal regimes overview)_ | Regime | Mechanism | Examples | | --- | --- | --- | | **Concession / Royalty + Tax** | Operator pays royalty + standard CIT (often ring-fenced) | UK (Brent, North Sea), Norway, US (federal + state royalty + CIT), Canada, Australia | | **Production Sharing Contract (PSC)** | Operator recovers costs from "cost oil/gas"; "profit oil/gas" split with government per scale | Indonesia, Nigeria, Angola, Egypt, Algeria, Brazil pre-salt, Kazakhstan | | **Service / Risk Service** | Operator paid fee per unit produced; government retains ownership | Mexico (pre-2014 reform), Iran (buyback), Iraq (technical services contract) | ## Section 2 — UK North Sea fiscal regime ### 2.1 The ring-fence - **UK ring-fence rule** — UK upstream petroleum activities are "ring-fenced" — losses and profits from non-ring-fence trades cannot offset ring-fence profits. _([T1])_ ### 2.2 Three taxes - **Ring-Fence Corporation Tax (RFCT)** — 30% _(Finance Act 2002)_ - **Supplementary Charge (SC)** — 10% additional tax (reduced from 32% in 2016, reinstated to 10% in 2024) _([T1])_ - **Energy Profits Levy (EPL)** — 35% (rate increased to 38% from 1 November 2024 under Finance Act 2025 amendments; sunset extended to March 2030) _(Energy Profits Levy Act 2022; Finance Act 2025)_ - **Total effective rate** — 30% + 10% + 38% = 78% (post-November 2024) _([T1])_ - **Petroleum Revenue Tax (PRT)** — frozen at 0% from 2016 for new fields _([T1])_ ### 2.3 Allowances - **Capital allowances** — 100% first-year on most plant and machinery in ring-fence _([T1])_ - **Loss carryforward / carryback** — intricate _([T1])_ - **EPL investment allowance** — 44% (reduced from 80%) for qualifying ring-fence investment expenditure _([T1])_ ## Section 3 — Norwegian Special Tax - **Standard CIT** — 22% _([T1])_ - **Special petroleum tax (SPT)** — 56% (effective rate) _([T1])_ - **Combined marginal rate** — 78% _([T1])_ - **Cash-flow basis tax reform** — Recently introduced cash-flow basis for tax reform: full first-year deduction of qualifying upstream investment (reformed 2022); SPT calculated on operating cash flow less qualified investment expense _([T1])_ ## Section 4 — EU Solidarity Contribution - **Temporary solidarity contribution** — Temporary solidarity contribution on fossil fuel sector "surplus profits" _(Council Regulation (EU) 2022/1854)_ - **Surcharge rate** — 33% surcharge on profits above 120% of 4-year average _(Council Regulation (EU) 2022/1854 (October 2022))_ - **Member State implementation** — Member States implemented as temporary windfall taxes for 2022 and 2023 _([T1])_ - **Extension and UK treatment** — Most Member States extended through 2024-2025; UK has its own EPL outside EU framework _([T1])_ ## Section 5 — US oil and gas - **Federal CIT** — 21% _([T1])_ - **State CIT** — variable _([T1])_ - **Severance taxes** — state-level on extracted product (Texas oil severance 4.6%; Oklahoma 7%; ND 6.5%; WV 5%; etc.) _([T1])_ - **Royalty** — federal lease 18.75% offshore / 12.5% onshore (raised from 12.5% to 16.67% in 2022 reform); state and private lease rates negotiated _([T1])_ - **IDC (Intangible Drilling Costs)** — election to expense currently (§263(c)) _(§263(c))_ - **Depletion allowance** — percentage depletion for small producers (§613A) or cost depletion (§612) _(§613A; §612)_ - **Successful Efforts vs Full Cost** — financial accounting method choice (ASC 932) _(ASC 932)_ ### 6.1 Major mining jurisdictions **Major mining jurisdictions** _(Section 6 — Mining sector)_ | Country | Royalty | CIT | Notable | | --- | --- | --- | --- | | **Australia** | Mineral Resources Rent Tax (MRRT) repealed 2014; state royalties (NSW, QLD, WA variable 2-10%) | 30% CIT; full expensing of capital | Major iron ore, coal, gold | | **Canada** | Provincial royalty + CIT 26.5% combined | Federal 15% + provincial | Major potash, oil sands | | **Chile** | Mining royalty (2024 reform: ad-valorem + margin-based 1-2% + 10-32% on profits above thresholds) | 25% CIT | World's largest copper | | **Peru** | Mining royalty 1-12% by margin; Special Mining Tax 2-8.4% on operating margin; CIT 29.5% | 29.5% | Major copper, gold, zinc | | **South Africa** | Mining royalty 0.5-7% by refined vs unrefined | 27% CIT (post-2024) | Major platinum, gold | | **Indonesia** | Royalty 3-6% by mineral; PSC for oil/gas | 22% CIT | Major coal, nickel | ### 6.2 EITI (Extractive Industries Transparency Initiative) - **EITI reporting** — 50+ implementing countries publish reconciled extractive payments and receipts. EU Accounting and Transparency Directives require listed extractive companies to publish payments to governments (Country-by-Country Reporting equivalent). _([T1])_ ### 7.1 Successful Efforts vs Full Cost - **Successful Efforts** — only successful exploration costs capitalised; dry holes expensed. _([T1])_ - **Full Cost** — all exploration and development costs capitalised in "cost pool" by country. _([T1])_ - **GAAP/IFRS treatment** — US GAAP ASC 932 permits both. IFRS 6 (Exploration and Evaluation Assets) allows choice for E&E phase but development phase aligned to IAS 16 / IAS 38. _(ASC 932; IFRS 6; IAS 16; IAS 38)_ ### 7.2 Asset Retirement Obligation (ARO) / Decommissioning - **ARO recognition** — IAS 37 / ASC 410: provision for future decommissioning recognised at discounted PV of cost when constructive obligation arises (typically at first production). _(IAS 37; ASC 410)_ - **Provision accounting treatment** — Provision debited as asset addition; depleted with the reserve _([T1])_ - **Tax deduction timing** — Tax deduction generally only when actually incurred (jurisdiction-specific) _([T1])_ - **Deferred tax impact** — Material deferred tax timing difference _([T1])_ ### 7.3 Reserves estimation (PRMS) - **Petroleum Resources Management System** — 1P (proved), 2P (proved + probable), 3P (proved + probable + possible). Recoverable reserves drive depletion accounting. _([T1])_ ## Section 8 — Pillar Two interaction - **Pillar Two complexity for extractives** — Extractives jurisdictions with low CIT but high royalty/severance face Pillar Two complexity: - Royalty is typically treated as "Covered Tax" if levied on income (some jurisdictions classify as production tax, ambiguous) - Severance taxes mostly NOT Covered Taxes - Carve-out for "International Shipping Income" exists; no equivalent for extractives - Substance-Based Income Exclusion (SBIE) particularly material for capital-intensive extractives _([T1])_ ## Section 9 — Self-checks - [ ] Fiscal regime classified (concession / PSC / service) - [ ] Ring-fence applied where required (UK) - [ ] EPL / SC rate current - [ ] Royalty treatment (revenue vs Covered Tax) confirmed - [ ] Successful Efforts vs Full Cost election documented - [ ] ARO / decommissioning provision recognised - [ ] Depletion / depreciation per tax basis - [ ] EITI / CbC reporting submitted where applicable - [ ] Pillar Two analysis for in-scope groups - [ ] Output flags every [T2]/[T3] item for reviewer judgement ## Section 10 — Disclaimer Extractives taxation is highly specialised. Outputs must be reviewed by credentialed extractives sector practitioners. The most up-to-date version is at [openaccountants.com](https://openaccountants.com). ## Talk to a verified accountant This skill is a tool, not an engagement. Every taxpayer's situation is different, and the rules in the skill may not match your specific facts. To speak with one of the licensed accountants who verifies skills for your jurisdiction — **no liability on either side until you and the accountant sign a formal engagement letter** — book a free 30-minute call: **→ [Book a call](https://calendly.com/openaccountants-info/30min)** We'll route you to the named verifier covering your country or state. You can also see the full list of verified accountants at [openaccountants.com/network](https://openaccountants.com/network).