Guidance note 29 on project-level reporting
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Company taxes and other payments related to oil, gas and minerals are often levied on a project-level basis, i.e. per individual legal agreement giving rights to an extractive deposit. Government entities collecting such payments also record the receipts by project in their internal systems, often with the exception of general taxes such as corporate income tax, which is typically (but not always) levied and recorded by legal entity.
Public disclosure of payments by project may enable the public to assess the extent to which the government receives what it ought to from each individual extractive project, comparing the terms governing a project with data on actual payments. For host communities, it could contribute to show the benefits that each extractive project generates. It has also been argued that project-level reporting can help address tax avoidance and tax evasion by shedding light on transfer pricing practices. It can also assist governments in making more accurate forecasts for future changes in revenues. In terms of costs and benefits of project-level reporting in the EITI, it has been pointed out by government agencies in particular that reporting by project would be easier than current reporting, as it would be more consistent with how governments levy and record payments or revenues. This could reduce time, costs and discrepancies in EITI Reporting. The investor community has also been supportive of project-level reporting, noting how such reporting can contribute to a more stable investment climate and improve investors’ ability to manage risk.
Over the past few years, several jurisdictions have made efforts to adopt regulations which require companies engaged in natural resource extraction to disclose the payments they make to governments, including state-owned companies. At the Board Meeting in Bogota March 2017, the EITI Board reaffirmed that project level reporting is required for all EITI disclosures covering fiscal years ending on or after 31 December 2018 . This note provides guidance to EITI implementing countries on how to disaggregate EITI financial disclosures by project. Specifically, it provides step by step guidance on how to define a project, how to identify the level of disaggregation for each revenue stream, as well as who should report.
Requirement 4.7 Level of disaggregation
The multi-stakeholder group is required to agree the level of disaggregation for the publication of data. It is required that EITI data is presented by individual company, government entity and revenue stream. Reporting at project level is required, provided that it is consistent with the United States Securities and Exchange Commission rules and the forthcoming European Union requirements.
Source: EITI Standard 2016
In addition to company (and government) reporting of payments (receipts) on a project-by-project basis, the EITI Standard has a number of provisions that include the phrase: “commensurate with the reporting of other payments and revenue streams (4.7)”, which implies project-level disclosures. This concerns reporting of the sale of the state’s share of production or other revenues collected in kind (requirement 4.2), infrastructure provisions and barter arrangements (requirement 4.3), transportation revenues (requirement 4.4), social expenditures by extractive companies (requirement 6.1), and quasi-fiscal expenditures by SOEs (requirement 6.2).
Extracts of the EITI Board decision of 8 March 2017
“The Board reaffirmed that project level reporting is required. The national multi-stakeholder group should devise and apply a definition of the term project that is consistent with relevant national laws and systems as well as international norms (…) Project level reporting is required for all reports covering fiscal years ending on or after 31 December 2018. Given the EITI’s “two-year rule” (requirement 4.8), this would effectively require project level reporting by all countries by 31 December 2020 at the latest. In the interim, the current language of requirement 4.7 remains (…)”.
The EITI has tasked the MSG to “devise a definition of the term project that is consistent with relevant national laws and systems as well as international norms”. The MSG is therefore advised to explore the following questions:
(1) What definitions of ‘project’ are used in other jurisdictions?
Article 41(4) of the European Union Accounting Directive defines a project as: “the operational activities that are governed by a single contract, license, lease, concession or similar legal agreements and form the basis for payment liabilities with a government. None the less, if multiple such agreements are substantially interconnected, this shall be considered a project.”
Canada’s Extractive Sector Transparency Measures Act (ESTMA)  contains an equivalent definition of the term project, stating that “A “project” means the operational activities that are governed by a single contract, license, lease, concession or similar legal agreement and form the basis for payment liabilities with a government. Nonetheless, if multiple such agreements are substantially interconnected, this shall be considered a project.” “Substantially interconnected” means forming a set of operationally and geographically integrated contracts, licences, leases or concessions or related agreements with substantially similar terms that are signed with a government and give rise to payment liabilities.
These definitions show that one of the key take-aways from global practice is that what constitutes a project is linked to the forms of legal agreement(s) governing extractive activities between the government and companies. In other words, in a production-sharing regime, a project is typically the contract that gives rise to payment liabilities. In a tax/royalty regime, a project is typically the license that gives rise to payments.
(2) What are the types of legal instruments governing the extractive activities in the country?
To ensure that the definition of the term ‘project’ is consistent with national laws and systems, the MSG is advised to gain an understanding of the types of legal instruments that govern extractive activities in their country. Legal instruments can take many forms, including contracts, concessions, production-sharing agreements and other agreements, as well as licensees, leases, titles and permits governing rights to develop oil, gas and minerals. It is recommended that the MSG produces a list of the types of instruments that exist and should therefore be part of the definition of ‘project’.
(3) Are substantially interconnected legal agreements an issue in the country?
Both the EU and Canadian definitions of projects include wording on “substantially interconnected” legal agreements which allow for multiple legal agreements to be grouped together to form one project in cases where all of the following criteria apply: the legal agreements are both operationally and geographically integrated and have substantially similar terms. It is important to note that the definition of project found in the EU and Canadian laws was designed to apply to a company reporting in all countries of operation and therefore allows some flexibility. While the wording relating to ‘substantially interconnected agreements’ is open to different interpretations , for the purposes of EITI reporting MSGs should follow the guiding principle that project level payments should be reported in relation to the legal agreement which forms the basis for payment liabilities with the government.
(4) Documenting the definition of project
Once the MSG has considered the points above and taken a decision on what constitutes a project in their country, it is recommended that the definition of project is documented in MSG meeting minutes, including the rationale for arriving at the definition. A practical approach could be for the MSG to simply tailor and edit existing definitions to the national context, using the following “definition template”:
“In [country], a project is defined as the operational activities that are governed by a single [contract, agreement, concession, license, lease, permit, title, etc.] and form the basis for payment liabilities with a government”.
Even if licenses and contracts form the basis for payment liabilities, this does not necessarily mean that all types of payments are levied by license or contracts. Although extractive-specific revenue flows like production share, royalties, bonuses and license fees are typically levied by project, other payments like corporate income tax are often levied in relation to the legal entity holding the license . Understanding the fiscal regime, and distinguishing between payment liabilities levied on a company basis and those levied on licenses or other legal agreements, will help clarify which revenue streams should be disaggregated by project and those that are only subject to be disaggregated by company. The MSG is therefore advised to explore the following questions:
(1) What is the fiscal regime governing the extractive sector and what are the different types of payments arising from licenses and contracts governing oil, gas and mining operations?
The MSG is advised to review and gain an understanding of what taxes, fees and other payments extractive companies are required to make to the government. Typical revenue streams include royalties, corporate income tax, production share, dividends, bonuses and fees. These payments may be constitutionally mandated, required by national or local legislation or regulation, or set out in a license or contract. Requirement 4 of the EITI Standard outlines the revenue streams that should be covered in the EITI Report provided that they are material, and further mandates the MSG to agree which payments and revenues are material and therefore must be disclosed. The MSG may wish to consider relevant laws, regulations and model contracts and consult relevant ministries, tax collecting entities, and extractive companies in order to gather a complete picture of all existing revenue flows. Please consult guidance note 13 for further advice on identifying material revenue streams for the purpose of EITI reporting .
(2) Which of these payment types are levied on a license/contract basis, and which are levied on a company basis?
Some of the revenue streams that should be included in EITI reporting may not be imposed at project level. These are said to be levied or imposed on a company or entity basis. The Canadian and EU rules recognise that such payments may be disclosed at entity level without artificially assigning them to particular projects: “Payments made by the undertaking in respect of obligations imposed at entity level may be disclosed at the entity level rather than at project level” .
In Norway, area fee, CO2 fee and NOx fee are levied by license, whereas taxes are levied by corporate entity. The below illustrates how Total discloses these payments when applying project-level reporting:
Figure 1: Screenshot of Total’s report on payments to the Government of Norway
Source: 2016 Registration Document, Total (2017). Excerpt from page 338.
The rights to explore or exploit oil and gas in Norway are governed by license agreements. The payments companies make to the government pursuant to license agreements are corporate income tax, petroleum tax, area fee, CO2 fee and NOx fee. The taxes are levied on an entity level and are not attributable to individual licenses. Given that there are always multiple parties to each license, the government requires the parties to regulate their activities through a joint operating agreement without incorporating a specific legal entity. As such project-level reporting in Norway entails disclosure of fees per license, and disclosure of taxes per entity.
MSGs are therefore advised to consult the legal framework and revenue collecting agencies in order to identify which revenue streams are levied by project, and which are levied by corporate entity. Sometimes, the definition of a revenue stream can help determine whether a particular payment is levied on a project or an entity basis. For example, in Burkina Faso there are so-called area/surface taxes (Taxes Superficiaries). As this payment obligation is named a tax, it could suggest that it is a payment which is not levied on the basis of licenses. However, by examining the definition of the payment obligation it is clear it is levied on a project level. These are annual payments every holder of a mining title is obliged to make based on the area-size covered by a license. The liability of rights-holders in this case is mandated by law, through Burkina Faso’s Mining Code and two additional decrees .
Other payments levied on projects include production shares/entitlements (sometimes also known as profit oil), a common feature of production sharing agreements and contracts (PSAs/PSCs). In these instances, the agreements between companies and the state gives rise to payment obligations of companies, less “allowable expenditures” or cost oil. As the agreements give rise to the production entitlements of the government, these payments are therefore levied on a contractual or project basis. It is not levied on a company-basis, as a company may have multiple agreements or contractual arrangements.
(3) Are there any obstacles to disclosing payments levied by project as such?
In reviewing how revenue streams are levied, the MSG should also look out for any practical obstacles to project level reporting and reform needs. As documented in the case study on the Philippines below, government record keeping systems might not always enable project level disclosure.
The Philippines disclose certain revenue streams in their EITI report by project. PHEITI has explained that many payments are imposed per project, as well as reported as such (see table below). Royalties, occupation fees, field based investigation fees, annual rentals and government share of production are all payment liabilities levied per project, and reported in this way. Excise taxes and corporate income taxes are also imposed per project, alongside withholding taxes for royalties to claim owners. However, these are not reported per project due to the format of the tax filing forms. In pursuing project-level reporting, it is therefore important that PHEITI together with the relevant government agencies consider whether reforms such as e.g. amending tax filing forms are needed in order to comply with the project-level disclosure requirement by FY 2018.
Table 1: Revenue streams in the Philippines, how they are levied versus level of disaggregation
(4) Documenting the findings on how revenues should be reported
The MSG is advised to document the findings of its review of how the various payments and revenue streams are levied. Building on the “definition template” suggested under step 1 above, a practical approach could be for the MSG to attach the following explanation to their definition of project in order to clarify which payments should be disaggregated by project vs company:
“Where payments are attributed to a specific project – [list the payment types levied by project] - then the total amounts per type of payments shall be disaggregated by project. Where payments are levied at an entity level rather than at a project level – [list the payment types levied by company] – the payments will be disclosed at an entity level rather than at a project level.”
In accordance with the EITI Standard, all oil, gas and mining companies that make material payments to a government entity, including state-owned enterprises (SOEs) are required to disclose their payments. This principle is retained also in project level reporting. However, in arrangements which involve multiple parties it might be necessary to identify what kind of payments are effectuated by the different parties to the contract. It might also be necessary to look at the payments effectuated by government bodies, like SOEs. MSGs are therefore advised to consider the following questions:
(1) Are projects involving multiple participants common in your country? If so, who effectuates the payments to the government?
Given the risks and costs associated in particular with upstream oil and gas projects, agreements are often entered into by several companies which act together in a consortium. They share risk, costs and financing and typically designate an operating company which may have more administrative and operational responsibilities than other participants.
In some countries the operator is responsible for effectuating the payments. This means that the operators perform payments to governments on behalf of the consortiums/JVs as a whole, with other parties indirectly making payments to governments. Typically this excludes taxes which tend to be levied on each individual participant. A settlement between the various participants is then performed as internal transactions within the consortium/JV.
In such cases, for the purpose of EITI reporting, the operator could disclose the payments they make to the government on behalf of the consortium/JV, with other parties disclosing any payments levied directly on them. Alternatively, the operator could disclose their share of the payments and taxes, excluding those made on behalf of the consortiums/JVs. Other parties would also disclose their respective share of the payments and taxes imposed on the consortium/JV.
In other countries, as is common in francophone African countries, all participants to a contract are responsible for their respective shares of payment liabilities. In such cases, for the purposes of EITI reporting, each participant would disclose their payments to the government.
Regardless of the system agreed by the MSG for company reporting, the government agencies would report the total revenues received for the project in accordance with how these revenues are recorded in their systems.
In Indonesia, revenues are disaggregated by individual operator and by individual block for non-tax payments (production share, royalty, DMO etc.). Tax payments are not paid by operators and are therefore reported by each party to a PSC, per PSC.
In Trinidad and Tobago, the operator is responsible for paying to the Ministry of Energy and Energy Industries (MEEI) a profit share and other payments on behalf of itself and other parties in the PSC. However, if MEEI participates in the PSC, the ministry is …
“[…] responsible under the PSC for payment, […] out of the Government’s Share of Profit Petroleum, of the Contractor’s liability for Royalty, Petroleum Impost, Petroleum Profits Tax, Supplemental Petroleum Tax, Petroleum Production Levy, Green Fund Levy, Unemployment Levy and any other taxes or impositions whatsoever measured upon income or profits arising directly from the operations.” (Trinidad and Tobago EITI Report 2014 and 2015, page 65 ).
This means that all payment liabilities levied on companies for these projects are voided, while the only payment obligation levied on projects is the Government’s Share of Profit Petroleum, less the payments made by MEEI on behalf of the companies.
In Kazakhstan, some PSAs are still in use as the governing instrument for petroleum projects. One of the largest is Tengizchevroil LLP, an incorporated joint venture which, according to Kazakhstan’s 2015 EITI Report, is now owned by Chevron, ExxonMobil, KazMunaiGas and LukArko. As it is an incorporated joint venture, operated by Tengizchevroil LLP, the operator has its own taxpayer ID number (930440000929) and would be treated as a single company under a PSA for the purposes of EITI reporting.
In other instances, the government may require the parties to regulate their activities through a joint operating agreement without incorporating a specific legal entity. Such arrangements are typically considered unincorporated joint ventures.
Company example: Proportionate reporting of production entitlements by Statoil
Statoil’s 2015 Payments to governments report includes production entitlement payments to host governments for unincorporated joint ventures, including payments made indirectly via the operator. Statoil explains that it does this “because host government entitlements in some cases constitute the most significant payment to governments and because these payments are not always transparent to the civil society”. Statoil proportionately reported its 2015 production entitlements payments to host governments totalling just over US $2 billion. Of this, $1.9 billion (95%) was attributable to production entitlement payments for projects where Statoil was not the operator.
(2) Does a state-owned enterprise operate in your country? If so, what role do they play and how do they disaggregate payments and/or receipts?
State-owned enterprises (SOEs) often represent important institutions in the extractive sector of EITI implementing countries. Although less common or dominant in the mining sector, they may still play an important role by owning and operating projects, or through their participation in joint ventures.
The EITI requires that the multi-stakeholder group ensures that the reporting process comprehensively addresses the role of SOEs, including material payments to SOEs from oil, gas and mining companies, and transfers between SOEs and other government agencies (see requirement 2.6).
Where the sale of the state’s share of production or other revenues collected in-kind is material, the government, including state-owned enterprises, are required to disclose the volumes sold and revenues received relating to that production and to publish data disaggregated by individual buying company (requirement 4.2). The multi-stakeholder group should consider how the project definition adopted is best applied to sale of the state’s share of production. For example, which legal agreements (e.g. contracts) give rise to payments made by buying companies related to sale of the state’s share of production or other revenues collected in-kind.
MSGs should take care in ensuring that SOEs will now have to report in a more disaggregated form, same as private companies as outlined under step 2.
Sometimes SOEs act as a fiscal agent by collecting revenue on behalf of governments. In the Republic of the Congo, their state-owned enterprise receives in-kind payments from private companies on behalf of the state for marketing. In this instance, once companies’ payments are reported per project, the government’s share will also implicitly be disaggregated by project.
Other times, SOEs may play similar roles as private companies by making payments to governments in accordance with their participation in various projects. In Ghana for example, Ghana National Petroleum Corporation (GNPC) participates in multiple petroleum projects and effectuate specific payments that are levied through contracts – lifting barrels of oil intended for the payment of carried and participating interests, as well as royalties. So far, GNPC has reported these payments as aggregated transactions to the government. This means disclosures are made on a company basis, not by project.
Regardless of whether an SOE is considered a payer, a revenue collector, or both, disclosures by SOEs must be disaggregated by project if the payment type is levied by project.
Once the MSG has agreed the definition of project (step 1) and which payments should be disaggregated at project vs entity level (step 2), then the MSG should develop and agree reporting templates reflecting the outcomes. The EITI is considering developing a standard reporting template. In the meantime, here are some examples of reporting templates in use, which have been linked to compliance with project-level reporting:
The Philippines uses reporting templates which they specifically ask to be filled out per project. This ensures project-level reporting (for almost all revenue streams), which is also ensured as PH-EITI have only included companies that operate a single project in their latest scope:
Figure 2: Screenshot from Philippines' reporting templates
Source: Reporting templates, PH-EITI (2017). Excerpt from Oil and Gas Companies’ reporting templates
In Indonesia, oil and gas companies report on details for the various PSCs pertaining to different fields/blocks. They also include information regarding the different shareholders with their corresponding shares in ownership. The reporting templates are available on their website and provides disaggregated data by individual operator and by individual block for non-tax payments as these are payment obligations levied on projects through the respective PSCs (these non-tax revenues include production share, royalties, domestic market obligations and more). Tax payments are not paid by the operator but by each individual participating company and are therefore reported by each party to a PSC, per PSC (see figure 3a for operator reporting requirements, and 3b for participating companies’ reporting requirements).
To the left in the figure below, Indonesia requires operators of a project to disclose operational and financial information relevant to a project. However, as can be seen on the right-hand side, partners which are non-operators are only required to report on their tax obligations to the government.
Figure 3: Indonesian oil and gas companies reporting templates
a) Operator reporting template b) Non-operator reporting template
Source: Oil and Gas Operators’ reporting templates (left, figure 3a); Oil and Gas Partners’ reporting templates (right, figure 3b).
EITI Indonesia (2016). http://eiti.ekon.go.id/en/category/download/formulir-eiti/
The United Kingdom reports partially by project for specific payments obligations of petroleum companies. On page 9 of their latest EITI Report it is stated that “the MSG decided that PRT [Petroleum Revenue Tax] should be reported at the project level (i.e. by field).” 
Similar reporting tables were also included for other payment obligations levied on projects, such as Petroleum License Fee payments. The template for reporting on these payments therefore includes data identifying the licensee for a particular license, the license number, and the respective license fee-transactions corresponding to each of these. The reporting template of United Kingdom therefore enables project-level disclosures, the results of which are made available by the UKEITI MSG:
Table 2: (Re)payments of petroleum revenue tax in 2015 as reported by HMRC (in GBP)
(Re)Payment as reported by HMRC (£)
Apache North Sea
Royal Dutch Shell Group
Total Holdings UK Limited
Total Holdings UK Limited
Royal Dutch Shell Group
Centrica Energy E&P
Premier Oil [incl E.ON Ruhrgas]
Source: Data on payments of petroleum revenue tax by field 2015. UKEITI (2017).
Table 3: Payments of petroleum licence fees in 2015 as reported by the Oil and Gas Authority (in GBP)
Payment as reported by the OGA (£)
CNOOC [Nexen Petroluem U.K. Limited]
ENGIE E&P UK Limited (formerly GDF SUEZ E&P UK Ltd)
INEOS INDUSTRIES [incl. RWE DEA UK SNS Ltd]
CNOOC [Nexen Petroluem U.K. Limited]
Dong E&P (UK) Ltd
Total Holdings UK Limited
OMV (U.K.) Limited
Eni UK Limited
Chevron North Sea Limited
Xcite Energy Resources Ltd
Total Holdings UK Limited
Source: Data on payments of petroleum licence fees by licence in 2015. UKEITI (2017).
Mandatory disclosures under EU and ESTMA
The European Union Accounting Directive’s corporate disclosure rules were due to be transposed into national legislation by 20 July 2015 . Article 6 of the EU Transparency Directive extended the reporting obligations in the Accounting Directive to all relevant companies whose securities are publicly listed on EU regulated stock markets, regardless of whether they are incorporated in the EU. The Transparency Directive was due to be transposed into national legislation by 26 November 2015. In 2014, the United Kingdom transposed the reporting requirements into national law. Therefore, as an early adopter of the reporting requirements, the United Kingdom has ample examples of corporate filings under the EU Accounting Directive.
Corporate filings for UK incorporated companies under the UK legislation are available on Companies House extractives service which are accessible here: https://extractives.companieshouse.gov.uk/
Guidance for the Companies House extractives service can be found here: https://www.gov.uk/government/publications/filing-reports-for-the-extractives-industries/guidance-for-the-companies-house-extractives-service
Companies which are listed on the main market of the London Stock Exchange but not incorporated in the EU must file their reports according to the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules (DTR) 4.3A here https://www.handbook.fca.org.uk/handbook/DTR/4/3A.html and make an announcement to the UK’s National Storage Mechanism (NSM) here http://www.morningstar.co.uk/uk/NSM
Since the enactment of Canada’s Extractive Sector Transparency Measures Act (ESTMA) in 2015, more than 700 filings have been made by companies on their payments to governments by project. Therefore, the corporate filings repository is a valuable source of information to view existing practices of companies reporting by project.
However, it is noteworthy that project-level reporting under is different under EITI when compared to UK and ESTMA disclosures, in that EITI also requires government agencies to report. This means that the level of disaggregation and understanding of projects must to be the same for companies and government agencies.
For more information and guidance regarding company disclosures under ESTMA, please see https://www.nrcan.gc.ca/mining-materials/estma/18180
Examples of reporting templates
Please find links to specific reporting templates which incorporate project-level disclosures below:
Selected reporting templates from EITI implementing countries:
- Indonesia (excel): http://eiti.ekon.go.id/en/category/download/formulir-eiti/
- Philippines (excel): https://ph-eiti.org/Country-Reports/#/Reporting-Templates
- Trinidad and Tobago (excel): http://www.tteiti.org.tt/explore-data/open-data/
- United Kingdom (excel): https://www.gov.uk/guidance/extractive-industries-transparency-initiative
ESTMA and UK payments to governments reporting templates:
- ESTMA reporting templates (excel): http://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/mining-materials/PDF/ESTMA%E2%80%93ReportingTemplate.xlsx
- UK Extractives Service (XML schema) according to EU Directive: http://xmlgw.companieshouse.gov.uk/extractives.shtml
Proposed reporting templates for collecting project-level information
See attached excel-files for proposed reporting templates
 ESTMA Technical Reporting Specifications, p. 5, http://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/mining-materials/PDF/ESTMA–TRS.pdf
 See the International Association of Oil & Gas Producers’ (IOGP) Report 535: The Reports on Payments to Governments Regulations 2014 Industry Guidance, page 35: http://www.iogp.org/bookstore/product/the-reports-on-payments-to-governments-regulations-2014-industry-guidance/
 There are exceptions to this rule. For example, some countries ringfence financial accounts by certain activities or operations, and in such cases general taxes tend to be levied by project.
 Guidance note 13 on defining materiality, reporting thresholds and reporting entities, EITI (2016). https://eiti.org/sites/default/files/documents/guidance_note_13_on_defining_materiality_2016.pdf
 Art. 43(2)c of the EU Directive.
 See 2015 Burkina Faso EITI Report, p. 170. ITIE Burkina Faso (2017). https://eiti.org/document/burkina-faso-2015-eiti-report
 2014-2015 Trinidad and Tobago EITI Report. TTEITI (2016). https://eiti.org/document/20142015-trinidad-tobago-eiti-report
 2015 United Kingdom EITI Report, UKEITI (2017). https://eiti.org/document/2015-united-kingdom-eiti-report
 Information about Directive 2013/43/EU, European Commission. https://ec.europa.eu/info/law/accounting-rules-directive-2013-34-eu/law-details_en