Prompt and Intuitive Method

In the fast estimation method, the total income (I) is assumed as 100%, and calculation is made in accord with the order and the proportion of the contractual system. The calculation is conducted as follows: first, the host nation receives royalties (R), with a proportion of the royalties (Rt). Second, IOC recovers costs, with cost recovery limit (Rr). Third, after the deduction of the first and second steps, the remainder is the portion of the profit split of oil/gas (profit-sharing oil), from which the host nation take (Er) %, while IOCs gets the remaining percentage. Fourth, IOC has to pay income tax (T) to the host nation at tax rate (Tr). Taxable income is the income IOC ge<sup>t</sup> from oil/split profit. The host nation's income mainly includes three parts: R, E and T. Therefore, GT is calculated as

$$\mathbf{G}\mathbf{T} = \mathbf{R} + \mathbf{E} + \mathbf{T} \tag{2}$$

where,R=I × Rt, I = 100%, E = (I − R) (I − Rr) Er and T = (I − R) (I − Rr) (I − Er) Tr.
