PETROLEUM (PRODUCTION) REGULATIONS

SUBSIDIARY LEGISLATION 156.01

PETROLEUM (PRODUCTION) REGULATIONS

1st December, 2001

LEGAL NOTICE 320 of 2001, as amended by Legal Notices 410 of 2007

and 206 of 2023.

The title of these regulations is the Petroleum (Production)

Regulations.

Substituted by

(Regulation 6)

L.N. 206 of 2023.

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);

PETROLEUM (PRODUCTION)

(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.

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.

(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

s ha l l g r an t th e l i ce ns ee e x cl u si ve r ig h t s to ex p l or e by an y

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.

(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.

(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.

(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.

(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).

(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

t e r m s o f n a t io na l s e c u r it y an d in te rn a t io n a l r e la ti on s , 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 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.