Dominican Republic Upstream (Oil and Gas) Fiscal and Regulatory Guide

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Following recent exploration interest across the Caribbean region, the Dominican Republic introduced its first production sharing agreements to promote the development of its oil and gas sector. The fiscal terms introduced are attractive and are expected to remain favourable in the following years given the low-level of exploration activity in the country. In 2020, the Dominican Republic awarded Apache Dominican Republic Corporation the offshore Block SP2, through the country’s first licensing round. Prior to the COVID-19 pandemic, the country was looking to build on this through the launch of a second round, however it is possible that the round could be delayed until investment conditions improve.

“Dominican Republic Upstream Fiscal and Regulatory Guide”, presents the essential information relating to the terms which govern investment into Dominican Republic’s upstream oil and gas sector. The report sets out in detail the contractual framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the state’s take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Dominican Republic’s upstream oil and gas investment climate.


Overview of current fiscal terms governing upstream oil and gas operations in Dominican Republic

Assessment of the current fiscal regime’s state take and attractiveness to investors

Charts illustrating the regime structure, and legal and institutional frameworks

Detail on legal framework and governing bodies administering the industry

Levels of upfront payments and taxation applicable to oil and gas production

Information on application of fiscal and regulatory terms to specific licenses

Outlook on future of fiscal and regulatory terms in Dominican Republic

Reasons to Buy

Understand the complex regulations and contractual requirements applicable to Dominican Republic’s upstream oil and gas sector

Evaluate factors determining profit levels in the industry

Identify potential regulatory issues facing investors in the country’s upstream sector

Utilize considered insight on future trends to inform decision-making

Table of Contents

Table of Contents

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1. Executive Summary

1.1 Regime Overview ─ Production Sharing Agreements

1.2 Regime Overview – Concession Agreements

1.3 Timeline

2. State Take Assessment

3. Key Fiscal Terms – Production Sharing Agreements

3.1 Royalties, Bonuses and Fees

Surface Rental Fees

3.2 Production Sharing

3.3 Direct Taxation

Corporate Income Tax

Deductions and Depreciation

Withholding Tax

Minimum State Participation Tax

3.4 Indirect Taxation

Value Added Tax (ITBIS)

Customs Duties

Stamp Duty

3.5 Natural Gas Provisions

3.6 Domestic Market Obligation

3.7 Local Content

3.8 Abandonment Provisions

3.9 Joint Committee

4. Key Fiscal Terms – Concession Agreements

4.1 Royalties, Bonuses, and Fees


Surface Fees

Training Fees


4.2 Direct Taxation

Corporate Income Tax

Withholding Tax

Deductions and Depreciation

4.3 Indirect Taxation

Disposal of Interest

4.4 Natural Gas Provisions

4.5 Domestic Market Obligation

4.6 Local Content

4.7 Joint Committee

5. Regulation and Licensing

5.1 Legal Framework

Governing Law

Contract Type

Title to Hydrocarbons

5.2 Institutional Framework

Licensing Authority

Regulatory Agency

5.3 Licensing Process

2019 Licensing Round

Historic Licensing Rounds

Exploitation Period

Work Obligations

6. Appendix

6.1 References

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List of Tables

Table 1: Regime Overview

Table 2: Dominican Republic, Key Events Since Year 2000

Table 3: Dominican Republic, PSA, Annual Surface Rental Fees (US$/sq km), 2019 onwards

Table 4: Dominican Republic, PSA, Overall Production Sharing Rate (Rt) Ranges (%), 2019 Onwards

Table 5: Dominican Republic, PSA, Oil & Condensate Production Sharing Rates (%), 2019 Onwards

Table 6: Dominican Republic, PSA, Gas Production Sharing Rates (%), 2019 Onwards

Table 7: Dominican Republic, Depreciation Rates (%)

Table 8: Dominican Republic, Annual Surface Fees in Pesos (RD$), Maleno's Concession, 1998

Table 9: Dominican Republic, Annual Surface Fees in (US$), Mobil's and Petrolera's Concessions, 1991

Table 10: Dominican Republic, Royalty Rates For Oil (%), Maleno's Concession, 1998

Table 11: Dominican Republic, Royalty Rates For Oil (%), Mobil's and Petrolera's Concessions, 1991

Table 12: References


List of Figures

Figure 1: Regime Flow Chart – Production Sharing Agreements

Figure 2: Regime Flow Chart – Concessions Agreements

Figure 3: Dominican Republic, Indicative NPV10/boe, IRR and State Take Comparison, and Price and Cost Sensitivity Analysis

Figure 4: Dominican Republic, Legal Framework

Figure 5: Dominican Republic, Institutional Framework

Frequently asked questions

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