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Oil, Gas & Mining vocabulary · Industry, Reserves & Contracts

Royalty

Meaning in oil, gas & mining, with examples

/ˈrɔɪəlti/nounCommon term

In oil, gas & mining, royalty means: A payment that a producing company makes to the owner of the resource, usually the state, calculated as a share of the value or volume of the oil, gas or minerals produced.

In Turkish: devlet hakkı, devlet hissesi, royalti

How it is used

Usually given as a rate, such as a royalty of 12.5 percent. Royalties are paid on production, unlike income tax, which is paid on profit. Private royalty holders also exist, and mining companies sometimes sell royalties to raise money.

Example sentences

  1. The company pays a royalty of 12.5 percent on all oil produced from the licence.

  2. Higher royalty rates could make the project uneconomic.

Common collocations

  • royalty rate
  • pay royalties
  • royalty payments
  • net smelter return (NSR) royalty
  • production sharing agreement (PSA)A contract in which the state keeps ownership of the oil or gas, the company pays for exploration and development, and production is shared between them after the company's costs are recovered.
  • reservesThe amount of oil, gas or ore that is known to exist and can be produced at a profit with current technology and prices, estimated under set rules.
  • upstreamDescribing the first stage of the oil and gas business: finding hydrocarbons, drilling wells and bringing oil and gas to the surface.
  • feasibility studyA detailed technical and financial study that shows whether a mine or an oil and gas project can be built and run at a profit, used to decide whether to invest.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Industry, Reserves & Contracts

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