Hydrocarbons Code under Law

No. 99-93, 17 August 1999

And

Amendements

 

Unofficial Translation

 

 

 

July 2003

Hydrocarbons Code under Law No. 99-93, 17 August 1999

In the name of people,

The Members of Parliament having adopted.

The President of the Republic promulgates the following law:

Article 1.

Are promulgated by the present law under the title "Hydrocarbons Code", the legislative provisions, relative to the hydrocarbons prospecting, exploration and exploitation activities.

Article 2.

The provisions of the Hydrocarbons Code are applicable to hydrocarbons titles granted after its entry into vigor.

Are excluded from the field of application of the hydrocarbons code provisions and from the regulating texts taking for its application the exploitation concessions instituted and developed prior to the entry into vigor of the present hydrocarbons code.

However, upon a request presented to the granting authority within the delays foreseen in article 3 hereinafter, the holders of the said concessions may benefit from the following provisions of the hydrocarbons code:

• the provisions of the article 66.3 sub-paragraph "b" relative to the award of a electricity production concession to the holders of exploitation concessions,
• the provisions of articles 118 to 123 relative to the constitution of an allowance for the site abandonment and restoration costs,
• the provisions of article 100 sub-paragraph "f" and the provisions of the article 116.1 relative to the royalty for customs services,
• the provisions of article 113.3 sub-paragraph "a" relative to the constitution of a reserve for reinvestment.

Article 3

At the entry into vigor of the hydrocarbons code, the holders of prospecting permits or exploration permits in course of validity and/or exploitation concessions instituted but not yet developed, have the possibility to opt, with regard to the said permits and concessions, for the application of the present hydrocarbons code and the regulating texts taken for its application

The exercise of the option foreseen above shall be subject to a notification in writing prepared on tax stamped paper and signed by the holder of the permit and/or the exploitation concession or by a representative duly mandated to that effect.

Each hydrocarbons title shall be subject to a separate notification within a maximum period of six months as from the entry in vigor of the hydrocarbons code. This notification shall be addressed by registered mail with knowledge of receipt to be requested from the administration in charge of hydrocarbons or deposited directly at the said administration for a knowledge of receipt.

Failing to exercise the above mentioned option by the holder of a hydrocarbon title, the said title shall remain governed till its expiry by the legislative and regulating provisions and by the particular convention applicable thereto.

Article 4.

At the expiry of the aforementioned delay of six months, the Minister in charge of energy shall set by an arrêté published in the Official Gazette of the Republic of Tunisia, the list of the permits and exploitation concessions admitted to benefit from the provisions of the present hydrocarbons code.

The admission of hydrocarbons title holder to benefit from the provisions of the hydrocarbons code and the regulating texts taking for its application, following the exercise of the option mentioned in article 3 above, shall result in the application for the holder of the said provisions as soon as the mentioned in the aforementioned paragraph is published.

The juridical texts anterior to the present law notably the decree of 1^st January 1953 relative to mines, the texts mentioned in the article 5 hereinafter, as well as the provisions of the particular convention shall be no more applicable to the holder insofar as they are contrary to, or incompatible with the provisions of the present hydrocarbons code and the regulating texts taken for its application.

Article 5.

Notwithstanding the transitory regime mentioned in articles 3 and 4 above, the judicial texts mentioned hereinafter shall be abrogated as from the entry in to vigor of the hydrocarbons code. However, the validity of the previsions of these texts shall remain in vigor till the expiry of the hydrocarbons titles and the exploitation concessions developed prior to the entry into vigor of the present code for which their respective holders did not exercise the option offered by the present law

1. The decree dated 13 December 1948, holding institution of special provisions for the encouragement of the exploration and the exploitation of the mineral substances of second group.
2. The law n° 58-36 dated 15 March 1958, modifying the decree dated 13 December 1948, holding institution of special provisions for the encouragement of the exploration and the exploitation of the mineral substances of second group.
3. The decree-law nº 85-9 dated 14 September 1985, ratified by law nº 85-93 dated 22 November 85 holding institution of special provisions for the exploration and production of liquid and gaseous hydrocarbons.
4. The law nº 87-9 dated 6 March 1987, modifying the above mentioned decree-law n° 85-9 dated 8 September 1985.
5. The law nº 90-56 dated 18 June 1990, holding encouragement of the exploration and the production of liquid and gaseous hydrocarbons.

Article 6.

The hydrocarbons code shall be effective 6 months after the publication date of the present law.

As from the entry into vigor or the code, the petitioners of hydrocarbons titles can no longer ask for the application of the provisions of the decree dated 1st January 1953 relative to mines with the exception of the petitioners of exploitation concession derived from an exploration permit granted prior to the entry into vigor of the code for which the holder did not exercise the option mentioned in article 3 above.

The present law shall be published in the Official Gazette of the Republic of Tunisia and executed as law of the State.

Tunis, August 17, 1999

Zine El Abidine Ben Ali

 

 

 

 

 

HYDROCARBONS CODE

TITLE I

 DEFINITIONS AND GENERAL PROVISIONS

 

Article 1.

The subject of the present code is to define the legal regime applicable to the preliminary prospecting, exploration and exploitation of hydrocarbons, as well is to the constructions and facilities allowing the accomplishment of these activities.

Article 2.

The following expressions used in the code have the following meanings:

1. Preliminary prospecting works: the works aiming at the detection of hydrocarbon's existence by the use of geological techniques other than seismic shooting and drillings.
2. Prospecting works: the works aimed at the detection of hydrocarbons existence by the use of geological and geophysical techniques other than drillings pursuant to the provisions foreseen in article 10 paragraph 5 herein.
3. Exploration activities: the works and/or studies, notably but not limited to, geological, geophysical and drilling works, and production costs not exceeding 7 days each, aiming at discovering hydrocarbon Gelds and at appreciating the importance of the existing recoverable reserves and generally speaking all operations connected with these ones and aiming at the same objectives.
4. Exploitation activities: the works and studies notably, wells drying and completion as well as installing facilities in older to develop and put the hydrocarbon held into production, the preliminary treatment of the hydrocarbons produced in order to make them marketable, the hydrocarbons transportation, including by pipeline, the hydrocarbons commercialization and generally speaking, all operations connected with the precedent ones and aiming at the same objectives.
5. Hydrocarbons: liquid or gaseous hydrocarbons, solid hydrocarbons, bitumen, asphalt, helium and other rare gases.

Other mineral substances may be considered hydrocarbons by an arrêté of the Minister in Charge of Hydrocarbons upon a conform opinion of the hydrocarbon consulting committee, and be subject to the present code.

6. Liquid hydrocarbons: crude oil and natural gas condensate.
7. Natural gas: hydrocarbon blend existing in the reservoir in a gaseous state or at a solution state in the hydrocarbons under reservoir conditions. The natural gas includes the gas associated to the hydrocarbons, the gas dissolved in the hydrocarbons and the gas non associated to the hydrocarbons.
8. Commercial gas: natural gas from which some liquids and eventually gas of non hydrocarbons nature are extracted in order to make it suitable for consumption, according to the specifications agreed upon by the seller and the buyer of the commercial gas.
9. Hydrocarbons field: natural accumulation of hydrocarbons.
10. Maritime spaces: the sea and any portion of it under the jurisdiction of the Tunisian State.
11. National Enterprise: State owned enterprise wholly controlled and designated by the Tunisian State.
12. Contractor: the company performing for the account of the National Enterprise within a Production Sharing Agreement, the execution and the supervision of the hydrocarbons prospecting, exploration and exploitation activities.
13. Particular Convention: the hydrocarbons exploration and exploitation convention.
14. Holder: the title owner of a prospecting permit, Exploration permit, or Exploitation Concession or the title owners. In case the said permit and/or concession is jointly attributed to in any title owners. The said title owners are designated collectively owned and separately co-owners.
15. Affiliated companies means:

1.     Any company or organisation in which the co-Holder have directly or indirectly more than 50% of the voting rights in the shareholders meetings.

2.     Any company, organisation or public owned agency owning directly or indirectly more than 50% of the voting tights in the shareholders meetings of a CO-Holder.

3.     Any company or organisation in which, more than 50% of the voting rights in the shareholders meetings are owned directly or indirectly by a Co-Holder, in compliance with subparagraph 1 and 2 above jointly or separately.

16. Granting Authority: the Tunisian State represented by the Minister in Charge of Hydrocarbons or any other Administration Competent in the matters mentioned by the present code.
17. Environment: the physical works including the ground, the air, the sea, the underground and the surface water, water stream, lake, lagoon, sebkha and assimilated, as well as the spaces, the landscapes, the natural sites, the animal and vegetal species in their diversity and generally speaking all the elements of the nation's natural legacy.
18. Impact: any derangement, material or not, suffered directly or indirectly because of human acts on the environment, whether on a short or a long term basis.

Article 3.

The provisions of the present code, excluding those exclusively applicable to the activities of the Holder, are applicable to every working and/or service contractors acting as a substitute of the Holder in performing and supervising the hydrocarbons prospecting, exploration and/or exploitation activities.

Article 4.

Hydrocarbons fields located underground the Tunisian territory and within the Tunisian maritime space are, as national wealth, legally considered part of the Tunisian State public domain.

Article 5.

Hydrocarbons prospecting, exploration and exploitation activities are considered commercial acts.

Article 6.

6.1. Hydrocarbons prospecting, expiration and exploitation activities shall only be performed by virtue of a hydrocarbons title delivered by the Minister in Charge of Hydrocarbons.

6.2 The hydrocarbons titles are:

1. Prospecting Authorization.
2. Prospecting Permit.
3. Exploration Permit.
4. Exploitation Concession.

Article 7.

Hydrocarbons prospecting exploration and exploitation activities shall only be executed by:

1. The Tunisian State under modalities to be fixed for every particular case.
2. Public or private companies whether Tunisia or foreign having sufficient financial resources and technical capability to carry out the said activities in the best conditions.

To this effect the Granting Authority may, at any time, ask for an execution warranty covering the obligations relative to the minimum expenses and/or works to be performed, delivered by an organism agreed upon.

Article 8.

8.1 It is created a Hydrocarbons Consulting Committee whose opinion is imperatively requested in all the cases foreseen by the provision of the present code. The Minister in Charge of Hydrocarbons may also, require the opinion of this Committee on any other question relative to hydrocarbons.

8. 2. The Hydrocarbons Consulting Committee's composition and the functioning modalities are defined by decree.

 

 

 

 

                         TITLE  II

                                      THE PROSPECTING ACTIVITY

 CHAPTER I

      THE PROSPECTING AUTHORIZATION

Article 9.

9.1. The Prospecting Authorization is granted by a decision of the Minister in Charge of Hydrocarbons for a maximum period of one year. It can be granted to many petitioners for the same zone.

9.2. The Prospecting Authorization can be granted for an area covered by a Prospecting Permit or an Exploration Permit.

In such a case, the rights of the permit Holder remain completely protected and they prevail on the lights of the Prospecting Authorization's Holder obtained by virtue of this article, notably when the activities of the Prospecting Authorization's Holder are causing a direct and physical trouble to the permits Holder.

9.3. The Prospecting Authorization's Holder may perform, within the perimeter defined by the authorization, the preliminary prospecting works, with the exception of any seismic shootings and wells drilling.

The Granting Authority may designate a representative to participate to the these tasks.

9.4. The Prospecting Authorization may be canceled in case the Holder performs some works other than the ones foreseen in paragraph 3 of this article.

9.5. By the Prospecting Authorization expiry date, the Holder shall have delivered to the Granting Authority one copy of the realized studies and the information collected dining the performance of his works.

9.6. The Holder of a Prospecting Authorization who does not fulfil the obligations stated by paragraph 5 of the present article, can not be authorized to obtain neither a Prospecting or Exploration Permit, nor acquire interests in existing valid permits or concessions.

 

 

   CHAPTER  II

THE PROSPECTING PERMIT

 

Article 10.

10.1. The Prospecting Permit is granted by an arrêté of the Minister in Charge of Hydrocarbons upon a conform opinion of the Hydrocarbons Consulting Committee, for a 2 years period to any person fulfilling the conditions stated in article 7 herein.

Extensions of Prospecting Permit's validity may be granted upon a motivated request presented by the Holder for a total period not to exceed 12 months. The extension of the Prospecting Permit validity is grained by an arrêté of the Minister in Charge of Hydrocarbons upon a conform opinion of the Hydrocarbons Consulting Committee.

10.2 The Prospecting Permit can not be granted for a zone already covered at that date, by another Prospecting Permit, an Exploration Permit and/or a Exploitation Concession In case of straddle recognized after the award of the Prospecting Permit, the limits of the latter is rectified by an arrêté taken by the Minister in Charge of Hydrocarbons upon his automatic intervention or a request filed by any interested person.

10.3. An application for a Prospecting Permit is only acceptable when the subject surface is constituted by an full number of elementary perimeters defined in article 13.2 of the present code.

However, an application for Prospecting Permit delimited by an international frontier resulting in portions of elementary perimeter is acceptable.

10.4. The Holder of a Prospecting Permit is obliged to pay the fixed tax stated by article 101.1.1. herein. He is obliged to take commitments for expenditures and to realize geological and geophysical works within the conditions stated by paragraph 5 of the present article.

10.5. The Prospecting Permit entitles the Holder with the exclusive right to perform prospecting work in the area defined by the awarding arrêté with the exclusion of any drilling operations other than the ones not exceeding 300 meters deep destined to geological and seismic coring.

10.6. The Minister in Charge of Hydrocarbons may cancel a Prospecting Permit in case the Holder perform some works other than the ones foreseen in paragraph 5 of this article.

The arrêté canceling the prospecting Permit is taken upon an opinion of the Hydrocarbons Consulting Committee, the Holder having been heard on his transgressions before within reasonable time.

10.7. By the Prospecting Permit expiry date, the Holder shall have given the Granting Authority one copy of the seismic records, the studies and any other information collected during the performance of his works.

10. 8. The Holder of a Prospecting Permit who does not fulfill the obligations stated by paragraph 10.7 above, can not be authorized to obtain neither another prospecting and/or Exploration Permit, nor acquire interests in existing valid permits or concessions.

10.9. The Holder of a Prospecting Permit, subject to the fulfillment of the obligations taken by virtue of this article, has the priority right to have his Prospecting Permit transformed into an Exploration Permit on the basis of the conditions initially agreed upon by the Granting Authority and the Holder to exercise his right, the Holder shall request from the Granting Authority the transformation of his Prospecting Permit into an Exploration Permit at least 2 months prior to the expiry of the permit.

10.10. For the execution of his prospecting works, the Prospecting Permit's Holder is entitled to benefit from all the incentives and is subject to all the obligations made applicable for an Exploration Permit's Holder by the present code and the regulating texts taken for its application.

10.11. The modalities ruling the application for a Prospecting Permit, the application processing as well as the transformation into an Exploration Permit are set by an arrêté of the Minister in Charge of Hydrocarbons.

 

 

  

 

 

TITLE  III

THE EXPLORATION FOR HYDROCARBONS

                                                           CHAPTER  I

THE EXPLORATION PERMIT

SECTION I

The filing and the processing of the application

Article 11.

The modalities ruling the application for an Exploration permit, and the application processing rules are set by an arrêté of the Minister in Charge of Hydrocarbons.

Article 12.

The applicant for an Exploration Permit is required to have a physical or elected base in Tunisia. Failing to do so, he is required to designate to the Administration a representative based in Tunisia.

All notifications and notices made by third parties, relative to any procedure concerning the application of the present code are addressed to this base.

Failing to be addressed to this base as foreseen above, these notifications and notices are validly made to the offices of the Governorate of the city of Tunis.

Article 13.

13.1. To be accepted, the area subject of the application for an Exploration Permit shall consist of a full number of elementary perimeters everyone in one block.

However, the application for Exploration Permit delimited by an international frontier resulting in portions of elementary perimeters is acceptable.

13.2. The elementary perimeters, mentioned in the above paragraph, have a square form, each one covering an area of four (4) square kilometers. The edges of these perimeters are actual directions oriented north-south and east-west and are consisting of portions of parallels and meridians. Their summits are defined by geographical coordinates and by reference numbers to be fixed by decree published in the Official Gazette of the Republic of Tunisia.

Article 14

The applicant for an Exploration Permit is required to take commitments to realize an exploration working program within the requested perimeter during the permit's validity period, this program shall indicate the nature and the importance of the works to the performed, especially the geophysical and the drilling operations as well as the minimum amount of expenditures to be incurred for the realization of this program.

Article 15.

15.1. The Exploration Permit is granted notably on the basis of the technical and financial capacities of the applicant, the importance, the nature and the consistence of the proposed working program as well as the level of participation of the National Enterprise or the conditions ruling the Production Sharing Agreement foreseen in title 6 chapter 2 of the present code.

In all cases, the Exploration Permit is granted at the discretionary preference of the Granting Authority, with no right for the applicant partially or wholly rebuffed, to claim a compensation.

15.2. The rejection of the Exploration Permit application is notified to the applicant by the Minister in Charge of Hydrocarbons.

15.3. The fixed tax paid to the Tunisian State at the time of the application as foreseen in article 101.1.1 herein, shall not be refunded in case the application is rejected or canceled.

Article 16.

16.1. The award of the Exploration Permit shall not be prejudiced of the rights previously acquired by the Holder of a Prospecting Permit, an Exploration Permit or an Exploitation concession.

16.2. In case the Exploration Permit includes a perimeter straddling over an Exploration Permit, a Prospecting Permit or an Exploration Concession, the permit is granted only for the perimeters which are out of the said permits or concessions.

16.3 If the straddle is established only after the permit is granted, the permit limits rectification is pronounced automatically by an arrêté of the Minister in Charge of Hydrocarbons, or upon the request of the interested person.

16.4. In all cases, the Exploration permit is granted subject to the rights previously acquired by the permit's Holders.

 

      SECTION  II

The award of the exploration permit

 

Article 17.

17.1. The Exploration Permit is granted by an arrêté of the Minister in Charge of Hydrocarbons. Upon a conform opinion of the Hydrocarbons Consulting Committee and published in the Official Gazette of the Tunisian Republic.

17.2 The exploration Permit is granted for an initial period of 5 years maximum renewable within the conditions set by the present code, the regulating texts taken for its application and by the Particular Convention.

Article 18.

18.1. The Exploration Permit entitles the Holder with the exclusive right to realize the exploration activities within the perimeter of the said permit.

18.2. It also gives the Holder the exclusive right to obtain concessions within the conditions set by the present code, the regulating texts taken for its application and by the Particular Convention.

 

SECTION III

           The Particular Convention

 

Article 19.

19.1. The Particular Convention authorizes the exploration and exploitation of hydrocarbon field and sets the rules governing the Holder's direct or indirect operations relative to the exploration and exploitation activities realized within the area covered by the Exploration Permit and the concessions derived therefrom the said convention is concluded in compliance with the provisions of the present code and the regulating texts taken for its application.

19.2 The Particular Convention sets notably:

1. The conditions governing the hydrocarbons explorations ands exploitation activities, particularly those relative to the application of articles 14, 17, 18, 23, 27, 28, 31, 36, 37, 50, 56, 57, 58, 59, 60, 61, 62, and 108 of the present code.
2. The conditions governing the award of an Exploitation Concession notably:

a.     the rules to be respected by the concession Holder for the delimitation of the concession perimeter;

b.     the applicable modalities governing the case where the concession Holder may be obliged to continue the exploration work in his concession.

3. The modalities ruling the election for the perception mode of the royally in kind or in cash and the conditions of its perception.
4. The conditions ruling the incentives given to the Holder fur the realization of the facilities necessitated by its exploration and exploitation activities and for the use of the existing or future public installations.
5. The conditions ruling the way the administration control is exercised and those ruling the transmission of documents and information permitting this control.
6. The conditions ruling the cases where the violation of the Particular Convention is sanctioned by the cancellation of the concession.
7. The conditions ruling the cases where the foreign exchange regulations are applicable to the Holder.

19.3. The Particular Convention is signed by the Granting Authority represented by Minister in Charge of Hydrocarbons on one hand, and, on the other hand, the representative(s) of the Holder of the Exploration Permit duly mandated.

19.4 In case of Production Sharing Agreement mentioned in Title 6, chapter 2 of the present code, the Particular Convention is signed, on the one hand, by the Minister in Charge of Hydrocarbons and, on the other hand, the national enterprise in its quality of the Holder and the contractor duly represented by mandated representatives.

19.5. The Particular Convention is approved by a decree published in the Official Gazette of the Republic of Tunisia.

Article 20.

The Particular Convention may stipulate that the rights and obligations of the Holder are those existing from the provisions stated in this code and the regulating texts taken for its application in vigor at the date of the signature.

Article 21.

The litigation cases resulting from the application of the provisions of the Particular Convention may be settled by arbitration.

The Particular Convention will set notably, the nature, the mode and the procedure of arbitration as well as the conditions ruling the execution of the arbitrators verdict.

Article 22.

The Particular Convention serving as model shall be prepared in compliance with the present code and approved by decree.

 

SECTION IV

      The renewal of the Exploration Permit

Article 23.

The Exploration Permit Holder is entitled to renew his permit for 2 successive periods, each one covering a maximum duration of 4 years, provided that he:

1. fulfills the obligations subject of his commitments which non respect is sanctioned by the foreclosure or cancellation of the permit and particularly these relative of the minimum level of expenditures and works to be carried out within the perimeter covered by the permit, during the expiring validity period;
2. applies for the renewal at least 2 months before the expiry date of its validity period;
3. makes the commitment to carry oil during the considered renewal period; a minimum exploration program with the associated estimated cost being well considered a minimum expenditures commitment;
4. provides proof for his sufficient technical and financial capacities to carry out the aforementioned works within the best conditions;
5. has not committed infringements causing serious troubles to the environment.

Article 24.

The modalities ruling the application and the processing of the request for renewal relative to the Exploration Permit are set by an arrêté of Minister in Charge of Hydrocarbons.

 

 

Article 25.

The Minister in Charge of Hydrocarbons may, upon a conform and motivated opinion of the Hydrocarbons Consulting Committee authorize the Holder during the renewal of the Exploration Permit to reduce the minimum expenditures commitment initially fixed by the Particular Convention.

Article 26.

26.1. The Exploration Permit area, subject of the renewal, shall not exceed neither 80/100 of the initial total area increased by all extensions of the permit granted during the first renewal, nor 64/100 of the initial total area increased by all extensions of the permit granted during the second renewal.

26.2. The Holder sets at his discretion the relinquished areas of the permit which shall be notified in his application for renewal, otherwise, the Granting Authority will determine automatically on its own, the areas to be relinquished.

26.3. The renewal of an Exploration Permit originally consisting all in one bloc, may be granted for a maximum of 3 blocs, tied or not. Each bloc shall consist of a full number of elementary perimeters representing a regular geometric form. However, is acceptable the application for renewal, including portions of elementary perimeters in case where one or many of these blocs are delimited by an international frontier.

Article 27.

In case the Holder does not accomplish the minimum working program and/or the expenditures commitments agreed upon without infringing the provisions stated in article 23 paragraph b, c, d and e herein, he can apply for the renewal of his permit after paying to the Granting Authority the difference between the minimum level of expenditures subject to his financial commitments and the expenditures actually incurred in the permit or the amount needed to conclude the working program agreed upon by the Particular Convention. These payments are mandatory even if the holder relinquishes the Exploration permit and decides not to renew it.

Article 28.

28.1 In addition to the two renewal foreseen in article 23 herein, the Holder is entitles to a third renewal not to exceed 4 years if, by the expiry of the second renewal period, he has:

1. discovered a hydrocarbons field entitling him to obtain an Exploitation Concession and presented to that regard an application in compliance with the provisions of the present code and the regulating texts taken for its application;
2. fulfilled, by the expiry date, all his obligations during the Exploration permit validity period;
3. applied for the renewal at least two months before the expiry date of the Exploration permit validity period;
4. taken commitment to carry out, during the renewal period applied for, a minimum working program with the estimated cost to be considered as well as a minimum commitment for expenditures;
5. demonstrated sufficient technical and financial capacities permitting the accomplishment of the said works in the best conditions;
6. has not committed infringements causing serious damage to the environment.

28.2. The Exploration Permit area, subject of this third renewal, shall not exceed 50% of the permit initial area.

28.3. The areas to by relinquished and the notification relating thereto ire done within the conditions slated in article 26 herein.

28.4. The Holder benefiting from the renewal of his Exploration Permit following a discovery who did not accomplish his commitments for the working program and/or the expenditures, shall pay to the Granting Authority the difference between the minimum level of expenditures subject of his financial commitments and the expenditures actually incurred in the permit or the amount needed to conclude the working program agreed upon by the Particular Convention.

Article 29.

The renewal of the Exploration Permit is effective as from the permit expiry date and is granted by an arrêté of the Minister in Charge of Hydrocarbons upon a conform opinion of the Hydrocarbons Consulting Committee.

However, the Exploration Permit is tacitly prorogated without any formalities in case the administration did not render its decision relative of the renewal prior to the validity period expiry date, until such decision is rendered by the Minister.

 

 

 

 

 

CHAPTER  II

GENERAL PROVISIONS

 

Article 30

30.1 The Minister in Charge of Hydrocarbons may, upon a conform opinion of the Hydrocarbons Consulting Committee, extend the validity period and/or the area during the course of validity of an Exploration Permit, within the following conditions:

1. the application is filed by the I holder at least two months before the expiry date of the exploration Permit validity period;
2. the extension is granted for an additional period of 2 years and/or an additional area limited to 50% of the initial area of the Exploration Permit;
3. the expenditures and the working program are adjusted according in the extension of the validity period and/or the area of the Exploration Permit.

30.2. The Minister in Charge of Hydrocarbons may as well grant, upon a conform opinion of the Hydrocarbons Consulting Committee, a supplementary extension of one year in addition to the above cited extensions in case of:

• obstructions duly proved by the Holder restraining the normal course of his exploration activities;
• new commitments taken by the Holder to carry out supplementary works in addition of his initial obligations.

30.3. The Holder may also be granted an extension of 2 years maximum in case a discovery is made at the end of the validity period of the Exploration Permit and, the appreciation work foreseen in article 40 herein, can not be carried out during the remaining validity period. This extension concerns only the area of the Exploration Permit confining the discovery.

30.4. The extension of the validity period and/or the area foreseen in this article is granted by an arrêté of the Minister in Charge of Hydrocarbons upon a conform and motivated opinion of the Hydrocarbons Consulting Committee. This arrêté is published in Official Gazette of the Tunisian Republic.

30.5 The procedure for the application and the processing relative thereto are set by an arrêté of the Minister in Charge of Hydrocarbons.

Article 31.

The Holder is required to start his exploration activities within the 12 months following the award or the renewal of the permit and to regularly carry on his activities during every validity period.

Article 32.

The Minister in Charge of Hydrocarbons may, upon a conform opinion of the Hydrocarbons Consulting Committee, authorize the Holder to modify his working program in the course of validity of the Exploration Permit.

However, the expenditures commitments relative to the considered period shall remain unchanged, This modification shall not have any impact on the expenditures commitments relative to this validity period.

Article 33.

The Prospecting Permit and the Exploration Permit are legally considered movables and are indivisible. The sale of a Prospecting or an Exploration Permit is subject to the conditions defined in article 34 herein.

Article 34

34.1. Any partial or total transfer, in whatever form, by a co-Holder of the rights and obligations attached to his prospecting or Exploration Permit, is proscribed without the prior consent of the Granting Authority.

The prospecting or Exploration Permit can only be transferred, partially or wholly, to a company fulfilling the conditions required by the decision granting the permit and after obtaining the authorization of the Minister in Charge of Hydrocarbons upon conform opinion of the Hydrocarbons Consulting Committee.

However, are waived from the said authorization, the sale between affiliated companies. These sales are subject to a notification to be addressed to the Granting Authority. In such a case, the Granting Authority may require from the seller or the parent company a commitment ensuring the fulfillment of the obligations by the buyer, notably the accomplishment of the minimum working program. In all cases, the transaction shall be subject to a sale and purchase agreement signed between the seller and the buyer.

34.2. To case the permit is granted to many Co-Holders and subject to the notification to the Granting Authority, the relinquishment of interests made by one or many CO-Holders in the Exploration Permit shall not result in the cancellation of The permit it the remaining CO-Holders accept to assume the rights and obligations of the relinquishing partner(s). In such a case, the relinquishment is assimilated to a renouncement. In case this option is accepted by the remaining CO-Holders, the subject of the transfer shall be the rights and obligations relative to the remaining period.

34.3. In case of total or partial sale, the buyer shall, as from the date the sale is effective, assume all the obligations and be entitled of all the rights relative to the acquired interests, as deriving from the present code, the regulating texts taken for its application and the Particular Convention.

34.4. Subject to the authorization of the Granting Authority, the sale becomes effective at the date of signature by the two parties of the sale and purchase agreement. In all the cases, the sale shall be subject to an arrêté of the Minister in Charge of Hydrocarbons authorizing the said transaction. This arrêté is published in the Official Gazette of the Tunisian Republic.

34.5. The sale of interests to a company having their main office in, or constituted by virtue of the laws of a county not maintaining diplomatic relations with the Republic of Tunisia is prohibited even in case this company is affiliated to the seller.

34.6. The procedures for the application and the processing of the sale authorization request relative to an Exploration Permit are set by an arrêté of the Minister in Charge of Hydrocarbons.

Article 35.

35.1. The Exploration Permit Holder is entitled at any lime to relinquish some of the area covered by his permit provided that he notifies to the Granting Authority, the elementary perimeters subject of his relinquishments.

In such a case, the areas to be conserved at the occasions of the renewals are not reduced because of these voluntary relinquishments, the commitments for the minimum working program and the associated expenditures shall not be changed.

35.2. Subject to a notification to the Granting Authority, the Holder of an Exploration permit is entitled at any time to shorten the validity period of his permit provided that the commitments relative to the minimum working program and/or expenditures for the same validity period are accomplished.

35.3. The area to be conserved and/or the remaining validity period are set by an arrêté of the Minister in Charge of Hydrocarbons.

Article 36.

36.1. The Holder of an Exploration Permit may at any time relinquish his permit by virtue of a written declaration provided that the minimum commitments relative to the working program and/or the expenditures for that validity period are accomplished.

36.2. In case the commitments for the minimum working program and/or expenditures are not accomplished, the Holder may relinquish his permit by paying to the Granting Authority, a compensating indemnity equal to the difference between the minimum expenditures agreed upon and the expenditures incurred or the amount vended to conclude the minimum working program relative to the considered validity period of the Exploration Permit.

Article 37.

37.1. The Exploration Permit may be cancelled if the Holder:

1. does not fulfill the conditions defined in article 7 of the present code relative to the technical and financial capacities required to the award of permit;
2. has intentionally given false information in order to obtain an Exploration Permit;
3. does not fulfill the commitments agreed upon by virtue of article 14 herein;
4. did not respect the obligations stated by articles 31, 34.1, and 61 of the present code;
5. refused to assume the rights and obligations of the relinquished interests of a CO-Holder who did not sell the said rights and obligations within the conditions foreseen in article 34 herein;
6. refuses to communicate the information subject to the provisions of article 63 and 64 of the present code, as appended and developed in the Particular Convention;
7. refuses to follow the instructions prescribed by the hydrocarbons department Head within the conditions defined in articles 133 and 134 of the present code.

37.2. The cancellation is pronounced in the same way and forms used for the award of the Exploration Permit, after a warning notice addressed to the Holder by the Minister in Charge of Hydrocarbons.

37.3. The Holder of an Exploration Permit cancelled according to the provisions of the first paragraph of the present article is required to pay to the Granting Authority a compensating indemnity as foreseen in article 36.2 herein in case of relinquishment of the permit.

Article 38.

The Holder of an Exploration Permit normally expired, cancelled or relinquished shall not hold again participation, directly or indirectly, in the perimeters subject of this permit during a period of three years after the expiry, cancellation or relinquishment date.

However, the Minister in Charge of Hydrocarbons may, upon the Holder's request and a conform opinion of the Hydrocarbons Consulting Committee, shorten this duration to a minimum of 6 months period.

 

 

TITLE  IV

THE HYDROCARBONS EXPLOITATION

CHAPTER  I

THE EXPLOITATION CONCESSION

SECTION I

The conditions governing the award of an Exploitation Concession

 

Article 39.

39.1. The Exploitation Concession is granted to the Holder of an Exploration Permit in course of validity, fulfilling the conditions foreseen in the present code, the regulating texts taken for its application and the Particular Convention, who discovers within the perimeter of his permit, a hydrocarbons field considered economically exploitable.

39.2. The Tunisian State may, within the conditions previously agreed upon in the Particular Convention, authorize any company shoving the required technical and financial capacities to exploit a rendered, abandoned or foreclosed concession.

In addition, the Tunisian State may, in the same way and within the conditions previously agreed upon, grant to any company having technical and financial capacities, an Exploitation Concession destined to exploit a hydrocarbons field located out of the area covered by a Prospecting Permit an Exploration Permit or an Exploitation Concession.

Article 40.

40.1. In case the exploration activities of the Holder lead to a potentially exploitable discovery, the Holder is required to realize, before applying for an Exploitation Concession, an appreciation program within a period not exceeding 3 years in case the discovery's nature is liquid hydrocarbons and 4 years in case the discovery's nature is gaseous hydrocarbons, starting from the date when the discovery is considered potentially exploitable. The said date shall be notified by the Holder and agreed upon by the Minister in Charge of Hydrocarbons.

40.2 According to this article, a liquid or gaseous hydrocarbons discovery is considered potentially exploitable, if the Holder is able to justify to the Granting Authority, the conclusion of a successful production test.

40.3. During the appreciation program foreseen in paragraph 40.1 of this article, the Holder may be authorized by the Granting Authority to carry out some production tests required to embrace the conclusions relative the hydrocarbons producing reservoir behavior and the evolution of the wells productivity, in accordance with the conditions previously agreed upon between the Holder and the Granting Authority particularly concerning the tests duration and the production profile.

40.4. The expenses relative to the appreciation phase and the production tests, incurred prior to the Exploitation Concession application date, are accounted for as part of the minimum commitments of expenditures relative to the period covering the performance of the said works.

40.5. The hydrocarbons produced and sold during the production tests are subject to the conditions applicable to the hydrocarbons produced by an Exploitation Concession with the exception of the proportional royally to be perceived, in such a case at a rate of 15%.

Article 41.

41. 1 At the end of the appreciation phase, if the Holder estimates that the discovery is economically exploitable, he will be entitled to an Exploitation Concession covering his discovery within the conditions set by the present code, the regulating texts taken for its application and the Particular Convention.

41.2. In case the Holder establishes that the discovery is economically exploitable without need to any appreciation works, he may be granted an Exploitation Concession within the conditions slated in paragraph one of this article.

Article 42.

42.1. In case the Holder determines that the hydrocarbons discovery is not economically exploitable on a stand alone basis, the Granting Authority may, in order to make the exploitation economically profitable, authorize the joint operation with other discoveries located in one or many of the Holder's permits.

42.2. The Granting Authority may, for the same masons, authorize the joint operations of hydrocarbons discoveries located in permits owned by different Holders.

 

 

SECTION II

The procedure for the application and the processing relative thereon

 

Article 43.

The procedures for the application and the processing relative thereto are set by an arrêté of the Minister in Charge of hydrocarbons.

Article 44.

44.1. In order to be entitled to The Exploitation Concession foreseen in article 41 herein, the Holder shall present his application for the concession at least 2 months prior to the parent permit's expiry date and within a period of 12 months after the end of the appreciation or exploration works determining that the discovery is economically exploitable.

44.2. The Granting Authority may require the holder to surrender an Exploitation Concession considered economically exploitable, in case be does not proceed with the development of the discovery within the maximum period of six years in case of liquid hydrocarbons and eight years in case of gaseous hydrocarbons starting from the date of the discovery.

For the purpose of this article, the discovery date means the end of the production test period foreseen in article 2 of the present code, relative to the well constituting the discovery showing hydrocarbons accumulation.

In all cases, the Granting Authority may, upon a request made by the parent permit's Holder, prorogate the timeframes set by the present article in case it estimates that the economical conditions do not permit to respect the said delays,

Article 45.

The application for an Exploitation Concession can only be accepted for a perimeter consisting of a full number of elementary perimeters each of one bloc, confining the discovery and entirely located in the parent permit perimeter.

However, is acceptable the application for an Exploitation Concession including portions of elementary perimeters in case one or many of these perimeters are delimited by an international frontier.

Article 46.

To be receivable, the application for an Exploitation Concession shall include:

1. a commitment to develop the hydrocarbons field covered by the requested perimeter;
2. a development plan as defined in article 47 of the present code.

Article 47.

The development plan mentioned in article 46 herein shall particularly include:

1. a geological and geophysical study of the Geld including an estimation of the rescues in place and the proven recoverable reserves;
2. a reservoir study including the envisioned production methods and the estimated production profile;
3. an exhaustive study detailing the facilities necessitated by the hydrocarbons production, processing, transport and storage;
4. an economical study including a detailed estimation of the development and exploitation costs, establishing up the field economic value;
5. a study staling the needs in personnel along with ft plan for the recruitment and training of the local personnel;
6. a study for the valorization of the liquid hydrocarbons associated substances such as the dissolved or associated gas, the liquefied petroleum gas "G. P. L" and the condensates;
7. a safety and security study relative to the protection of the personnel, the facilities, the population and the environment against fires and explosions in compliance with the relevant Tunisian legislation and in the absence of such legislation, with the generally accepted safety practices and standards in the petroleum industry;
8. a