Petroleum (Production) (Amendment) Regulations, 2023

L.N. 206 of 2023

PETROLEUM (PRODUCTION) ACT

(CAP. 156)

Petroleum (Production) (Amendment) Regulations, 2023

IN EXERCISE of the powers conferred by article 5 of the

Petroleum (Production) Act, the Minister responsible for finance has

made the following regulations:-

The title of these regulations is the Petroleum (Production)

(Amendment) Regulations, 2023 and these regulations shall be read

and construed as one with the Petroleum (Production) Regulations,

hereinafter referred to as "the principal regulations".

Regulation 2 of the principal regulations shall be

substituted by the following new regulation

2. In these regulations, unless the context

otherwise requires

"Act" means the Petroleum (Production) Act;

"continental shelf" shall have the same

meaning as assigned to it in article 2 of the

Continental Shelf Act;

"data room" means the petroleum exploration

technical data that may be available for viewing by

an entity;

"Director" means the director responsible for

oil exploration;

"licensee" means the entity to whom the

licence is granted, its representative appointed in

accordance with the licence and any entity to whom

the rights conferred by the licence may have been

lawfully assigned.".

Regulation 3 of the principal regulations shall be

substituted by the following new regulation

3. (1) Any entity may apply in accordance

with these regulations for

(a)

a prospection licence;

(b)

an exploration licence; or

(c)

an exploration and production licence.

(2) The licence for the prospection of

petroleum shall grant the licensee the right to prospect,

on a non-exclusive basis, for petroleum in an area for

which the licence is granted, under the conditions and

requirements of the licence granted. The Minister shall

have the right, during the term of the prospection

licence, unless otherwise agreed, to grant an

exploration licence and, or an exploration and

production licence on any part of, or all of the

geographical area licensed under the prospection

licence.

(3) The licence for the exploration of petroleum

shall grant the licensee exclusive rights to explore for

petroleum, by any appropriate method except drilling,

in a geographical area or in a block or blocks or area or

areas for which the licence was granted, under the

conditions and requirements of the licence granted and

the right for the licensee to convert the said licence

into an exploration and production licence, in

accordance with the provisions of the Act and these

regulations.

(4) The licence for the exploration and

production of petroleum shall grant the licensee

exclusive rights to explore by any appropriate method

including drilling and to produce petroleum in a

geographical area or in a block or blocks or area or

areas for which the licence was granted, under the

conditions and requirements of the licence granted.".

Regulation 4 of the principal regulations shall be Substitutes

regulation 4 of

substituted by the following new regulation

the principal

regulations.

4. (1) The Minister shall initiate a procedure

for licensing

(a) by means of a notice inviting

applicants, which notice shall be published in the

Official Journal of the European Union at least

ninety (90) days before the closing date for

applications. The notice shall specify

(i) the type of licences available;

(ii) the geographical block or blocks

or area or areas for which an application

may be made as indicated in the notice;

(iii) the date and time by which an

application can be made;

(iv) the application fee, if any;

(v)

the fee for a data room visit, if

any;

(vi) the place where the application

needs to be submitted;

(vii) the proposed date for granting

licences;

(viii) the reference to the notice that

was published in the Official Journal of the

European Union indicating the criteria that

shall be applied for evaluating an

application; and

(ix) any other information, as may be

necessary; or

(b) by means of a notice published in the

Official Journal of the European Union indicating

which geographical block or blocks or area or

areas are available for licensing on a permanent

basis. The notice shall also specify

(i) the type of licences available;

(ii) the application fee, if any;

(iii) the fee for a data room visit, if

any;

(iv) the place where an application

needs to be submitted;

(v) the reference to the notice that

was published in the Official Journal of the

European Union indicating the criteria that

shall be applied for evaluating an

application; and

(vi) any other information, as

necessary

Provided that any significant change

in the information published in such a notice,

including but not limited to a geographical block

or blocks or area or areas that are no longer

available for licensing following the grant of a

licence or that have become available for

licensing following relinquishment or termination

of a licence, shall be the subject of an additional

notice.

(2) The Minister may decide not to apply the

provisions of sub-regulation (1) if and to the extent that

geological or production considerations justify the

granting of a licence to the licensee for a contiguous

area. The Minister shall ensure that the licensees for

any other contiguous areas are able to submit

applications in such a case and that they are given

sufficient time to do so.

(3) The following shall not be considered as a

grant of a licence within the meaning of sub-regulation

(1)

(a) the granting of a licence solely by

reason of a change of name or ownership of an

entity holding an existing licence or a change in

the composition of the said entity or the transfer

of a licence or assignment of rights arising from a

licence;

(b) the granting of a licence to an entity

having another type of licence where the

possession of a latter licence implies a right to the

granting of the former licence;

(c) the decision of the Minister, taken

within the framework of a licence and relating to

the commencement, interruption, extension or

cessation of the activities of the licence granted.".

Regulation 5 of the principal regulations shall be Substitutes

regulation 5 of

substituted by the following new regulation

the principal

regulations.

5. (1) Before the publication of the notice

in accordance with regulation 4(1), the Minister shall

publish on the Official Journal of the European Union

the criteria that shall apply for the granting of a

licence. These shall include but are not limited to

(a) the technical and financial capability

of the applicant;

(b) the way in which the applicant

proposes to prospect, to explore and, or to bring

into production the geographical area;

(c) the work programme proposed by the

applicant;

(d) any previous performance of the

applicant under any other licence granted to him;

(e) economic

and

financial

considerations;

(f) any other health, safety and

environment requirements; and

(g) national security or public interest

Provided that any change in the above

criteria shall be re-published in full in the Official

Journal of the European Union.

(2) The Minister shall apply the above-

mentioned criteria in a non-discriminatory manner

between the applicants.

(3) The Minister may refuse the granting of a

licence to an applicant, provided that this does not give

rise to discrimination between the applicants. In such a

case, when an application is rejected, if the applicant so

requests, the reason for such rejection shall be

communicated to the applicant.

(4) The Minister may refuse the granting of a

licence in accordance with the Act if the applicant fails

the due diligence exercise that may be conducted by the

Government.".

Regulation 6 of the principal regulations shall be

substituted by the following new regulation

6. (1) An application for a licence shall be

made in writing in the form set out in the Schedule or

in a form substantially similar. The application shall be

addressed to the Director and be accompanied by

evidence of payment of the appropriate fee, if any, and

with such information and evidence in support thereof

as is referred to in the Schedule and as may be deemed

appropriate in the circumstances with regard to that

application.

(2) If any of the information indicated in an

application changes after the application is submitted

but before the closing date for receipt of applications,

in the case of an application made under paragraph (a)

of regulation 4(1) or before a licence is granted or

refused through the application process under

paragraph (b) of regulation 4(1), as the case may be,

the applicant shall forthwith give notice in writing to

the Director giving particulars of the change.

(3) If the Minister makes any changes to the

conditions and requirements during the course of a

procedure under regulation 4(1), such changes shall be

notified by a notice published in the Official Journal of

the European Union.

(4) All information furnished to the Director in

pursuance of an application for a licence shall be

treated as confidential.

(5) An application for a prospection licence

may only be made following the publication of a

notice in accordance with paragraph (a) of regulation

4(1).

(6) An application for a prospection licence

may be made in respect of a geographical area or areas

published in accordance with paragraph (a) of

regulation 4(1)

Provided that the rights conferred by any

prospection licence which is granted shall not be

exercisable in any block or area in respect of which an

exploration or an exploration and production licence

granted by the Minister is for the time being in force,

except with the consent of the licensee to exercise in

that block or area any rights granted by that

prospection licence.

(7) Nothing in this regulation shall prevent

more than one application being submitted by the

same entity or more than one licence being granted to

it.".

Regulation 7 of the principal regulations shall be Substitutes

regulation 7 of

substituted by the following new regulation

the principal

regulations.

7. (1) Any prospective applicant, having

the necessary technical and financial capabilities, may

request to make a data room visit

Provided that for every data room visit there

shall be paid a fee in accordance with regulation 4(1)

Provided further that such a fee shall not

exceed five thousand euro (€5,000).

(2) With every application for a prospection or

an exploration licence there shall be paid a fee in

accordance with regulation 4(1)

Provided that such a fee shall not exceed ten

thousand euro (€10,000).

(3) With every application for an exploration

and production licence there shall be paid a fee in

accordance with regulation 4(1)

Provided that such a fee shall not exceed

twenty thousand euro (€20,000).".

Immediately after regulation 7 of the principal regulations

there shall be added the following new regulations

8. (1) Every licence granted in accordance

with the Act shall incorporate clauses specifying the

conditions and requirements of the licence, as

respectively set out in the Model Prospection

Agreement, the Model Exploration Study Agreement

and the Model Production Sharing Contract and in

other terms and conditions as may be specified in the

notice published in accordance with regulation 4(1) or

as may be agreed to by the Minister and the licensee in

any particular case

Provided that copies of the model clauses

may be obtained from the Director upon application by

an entity.

(2) Without prejudice to the generality of the

preceding sub-regulation, the terms and conditions of a

prospection licence, an exploration licence and an

exploration and production licence may in particular

provide for the following matters

(a) the rental fee, if any, to be charged in

respect of the block or blocks or area or areas of

the licence;

(b) the rates of royalties to be paid, if any,

in respect of any petroleum won in the exercise of

the rights conferred by the licence, the method of

calculation of the amount of royalties and the

manner of payment thereof;

(c) the work obligations attached to the

licence;

(d) in the case of an exploration and

production licence, the sharing of profits between

the Government and the licensee derived from the

sale or disposal of petroleum won in the exercise

of rights conferred by the licence;

(e) in the case of a prospection licence,

the revenue derived from the sale of data;

(f) the provision, from time to time, of

information by way of returns, reports, maps,

samples, data, notices, records of operations or

otherwise;

(g) the protection of the environment, the

health and safety of the workers and the safety of

the installations; and

(h) such other terms and conditions which

may be necessary.

(1) All data or information collected or

compiled or interpreted or prepared during the exercise

of any licence pursuant to the Act or during the exercise

of any other agreement or arrangement related to any of

the activities of prospecting, exploring and producing

of petroleum contemplated in the Act or during a data

room visit, shall be and remain the property of the

Government, and shall be deemed to be confidential,

sensitive in terms of national security and international

relations, of a commercially sensitive nature and having

commercial value.

(2) Any person who publishes, discloses or

shares any data or information to any person without

authorisation in writing from the Minister, shall be

deemed to have committed an offence and shall, on

conviction, be liable to a fine (multa) of not less than

ten thousand euro (€10,000) and not exceeding two

million euro (€2,000,000) or imprisonment which shall

not exceed a term of five (5) years, or to both such fine

and imprisonment

Provided

that

the

obligation

of

confidentiality shall not apply

(a) when written consent has been given

by the Minister; or

(b) during Court, arbitration or mediation

proceedings.

(1) Any applications that were submitted

Transitory provision.

before the coming into force of these regulations shall

continue to be governed and regulated in accordance

with the Petroleum (Production) Regulations in force

prior to the coming into force of the said regulations.

(2) Any licences that were issued before the

coming into force of these regulations shall be deemed

to be valid and continue to be governed and regulated in

accordance with the Petroleum (Production)

Regulations in force prior to the coming into force of

the said regulations.".

9. The Schedule to the principal regulations shall be

substituted by the following new Schedule

"SCHEDULE

(regulation 6)

Form of Application for a licence in accordance with regulation 6

The applicants shall provide the following details

(a)

their name and surname, address and nationality;

(b)

their place of registration or incorporation, the

company registration number or any other distinguishing number

in the case of any other entity not being a company, its principal

place of business, the members of the Board of Directors and

senior management, the nationality and domicile of the members

of the Board of Directors, the capital structure and the factors

constituting control of the applicant by other natural or legal

person;

(c) their name and surname, address, telephone number

and email address of the contact person for the application;

(d) their form of organisation, including information

concerning their relationship with the parent company, if such

exists, and other affiliated persons;

(e) the financial structure of the applicant and the parent

company, if such exists, including annual reports, audited

balance sheets and profit and loss statements for the past three

(3) years, and any other reports which they and the parent

company may have filed to the competent authority for capital

market and transactions in securities regulation, during the past

three (3) years immediately preceding the application;

(f) the manner in which the activities shall be financed, if

the application is approved, and how the performance of their

obligations shall be guaranteed, including in the case of an

exploration and production licence, the proposed financial

security measures to cover liabilities and damages potentially

deriving from oil and gas operations;

(g) a list of their relevant work carried out in the past five

(5) years immediately preceding the application to demonstrate

their experience in petroleum prospection and, or petroleum

exploration and, or production of petroleum;

(h) experience of the key allocated personnel (detailed

curriculum vitae for each one describing their professional

experience);

(i)

safety statistics for the past three (3) years;

(j) proof of

an

implemented

health,

safety

and

environment system;

(k) the block or blocks or area or areas in respect of

which the application is made and if the application is made in

respect of more than one block or area, the priority assigned to

each block or area;

(l) a detailed description of the work programme

proposed for the block or blocks or area or areas applied for and

the geographical distribution over such block or blocks or area or

areas;

(m) the minimum obligations to be undertaken relating to

work and expenditure during the licence period;

(n) a description concerning the effects which the

activities are likely to have on the environment, and the proposed

mitigation measures;

(o) proposals relating to the commercial and economic

terms and conditions required as criteria for the evaluation of the

application, such as the financial considerations;

(p) any agreement between persons relating to the

manner in which petroleum operations are to be financed;

(q) any other information as may be required in the call

for applications pursuant to regulation 4(1) or under the

applicable model contract or which they want the Minister to

consider;

(r) a declaration that the information provided in the

application is true and correct; and

(s) signature of a duly authorised officer together with a

power of attorney authorising him to sign on their behalf.

In the case that the application is submitted by a consortium, or

by a group of two (2) or more natural or legal persons, the information

required above shall be submitted for each consortium member or for

each person and the consortium or group shall in its application,

designate one (1) person as representative of the consortium or group.

In this case, the application shall also include the participating interest

of each member of the consortium.".

€0.99