On behalf of the Nation; We, Habib Bourguiba, President
of the Republic of Tunisia; The Chamber of Deputies having adopted;
Promulgate the Law the terms of which are the following :
PART I : ADMINISTRATIVE PROVISIONS
AND REGULATIONS
Article 1: Purpose
The purpose of the Decree-Law hereunder is to estabilish special
provisions with regard to the exploration and production of liquid
and gaseous hydrocarbons. It applies to prospecting authorizations,
prospecting permits, exploration permits and exploration concessions
for mineral substances of the second group which are granted after
the date on which it is promulgated.
Article 2: Interpretation
For the purposes of applying the Decree-Law hereunder, the
term Holder shall refer to the holder of a prospecting permit
or an exploitation concession, whichever the case may be.
Article 3: Consultative Committee on Hydrocarbons
A consultative Committee on hydrocarbons is established to
replace the Consultative Committee on Mines for all matters
relating to liquid and gaseous hydrocarbons. It is mandatory
that the Consultative Committee on Hydrocarbons be consulted
in all the instances provided for under the Decree on Mines
dated January 1, 1953, as well as in all instances provided
hereunder. The Minister of Energy and Mines may, if he sees
fit, request the Consultative Committee’s opinion on any other
matter relating to hydrocarbons. The membership and by-laws
of the Consultative Committee on Hydrocarbons will be defined
by decree.
Article 4: Hydrocarbon Exploration
The exploration for liquid and gaseous hydrocarbons may only
be undertaken by virtue of a prospecting authorization, a prospecting
permit or an exploration permit. Prospecting authorizations are
only issued for areas which are little known and require basic
prospecting works.
Article 5: Prospecting Authorizations
Prospecting authorizations are issued by the Minister of Energy
and Mines for a maximum duration of one year. They may be granted
to several beneficiaries for a single area. Beneficiaries of
prospecting authorizations may carry out any preliminary prospecting
surveys and work except seismic surveys or profiling. The licensing
Authority may appoint a representative to take part in this
work. Upon the expiry of the authorization, the beneficiary
must give the Licensing Authority a copy of all surveys and
work undertaken.
Article 6: Prospecting Permits
Prospecting permits are issued by the Minister of Energy and
Mines on the advice of the Consultative Committee on Hydrocarbons,
for a maximum period of two years. They give the Holder thereof
the sole right to undertake prospecting work over the area in
question excluding, however, any boreholes other than intended
for the purpose of seismic coring, to a maximum depth of 300
m. The Holder of a propecting permit has the priority right
to the conversion of a prospecting permit into an exploration
permit in accordance with conditions agreed upon in advance
by the Licensing Authority and beneficiary. The Holder must
apply to the Licensing Authority for the conversion of a prospecting
permit into an exploration permit two months before the expiry
of the prospecting permit at the latest . The beneficiary of
a prospecting permit must make commitments with regard to expenditures
and undertake to carry out geological and geophysical work.
Upon the expiry of the term of the prospecting permit, he must
give the Licensing Authority a copy of all the surveys and work
undertaken.
Article 7: Exploration permits
Exploration permits are granted by virtue of a Convention and
a Memorandum of obligations approved by law in compliance with
current legislation; for the purposes of the Decree-Law hereunder,
these will be referred to as the Special Convention. Exploration
permits are granted for an initial period having a maximum duration
of 5 years and may be renewed in accordance with the conditions
stipulated under the Special Convention. Subject to the results
of a public enquiry and on the condition that the Special Convention
is approved, once the Order establishing the prospecting permit
has been published, the Holder of the exploration permit is admitted
to the benefits of the Decree of December 13, 1948 establishing
special provisions to facilitate the exploration and exploitation
of mineral substances of the second group, the Decree on Mines
dated January 1 st., 1953, Law n ° 58-36 dated March 15, 1958
amending the royalty on hydrocarbons, and the Decree-Law hereunder.
Article 8: Extension of the term and acreage
of the exploration permit and modification of the work program
The Minister of Energy and Mines may extend the duration and/or
the acreage of the research permit being currently valid and/or
modify the work program under the following conditions : a)
The application is lodged by the Holder no later than two months
prior to the expiration of the permit. b) The extension bears
a maximum additional duration of two years and/or an additional
acreage within the limit of 50% of the initial acreage permit.
c) The expenditures and work commitments are increased in proportion
to the extension in duration and/or acreage of the permit, Nevertheless,
the Minister of Energy and Mines may exempt the Holder from
increasing his expenditure commitments. The extension of duration
and/or of acreage is granted by Order from the Minister of Energy
and Mines, upon notification from the Consultative Committee
on Hydrocarbons. The Order of Extension is published in the
Official Journal of the Tunisian Republic. The Minister of Energy
and Mines may authorize the Holder to modify his work program.
However, the expenditure commitments remain unchanged.
Article 9: Exploitation of Hydrocarbons
Liquid and gaseous hydrocarbons may only be exploited by virtue
of an exploitation concession. The latter concession is granted
for a period of thirty years. An exploitation concession may only
be granted to the Holder of an exploration permit having fulfilled
the following conditions:
a) In the event of a potentially exploitable discovery the Holder
is required to carry out an evaluation program lasting at the
most three (3) years for discoveries of liquid hydrocarbons and
four (4) years for discoveries of gaseous hydrocarbons.
The expenditure relating to the evaluation work carried out
before applying for a concession is entered into the accounts
as a minimum expenditure obligation for the period during which
the work in question was undertaken.
b) When the evaluation work has been completed, if the Holder
considers the discovery to be exploitable he is entitled to be
granted an exploitation concession covering the deposit which
has been discovered, the latter being marked off in compliance
with the special conventions .
If, however, the Holder establishes without any additional evaluation
work that the discovery is economically exploitable, the Licensing
Authority may grant him an exploitation concession covering the
deposit which has been discovered.
c) Applications for a concession must be accompanied by a development
notification and a development plan as provided for under Article
10 hereunder, the development notification date is the date
on which the application for a concession is filed. In the event
that, other than in cases of unforeseen circumstances and contrary
to the implementation schedule provided for under Article 10
hereunder, development work does not commence within two years
as from the date of granting the concession.
d) Whatever the circumstances, if no decision has been taken
to develop a commercially exploitable discovery within six (6)
years as from the discovery date for liquid hydrocarbon discoveries
and eight (8) years for gaseous hydrocarbon discoveries, the
Licensing Authority may require the Holder to make the discovery
in question without any compensation.
c) Notwithstanding the provisions of paragraphs (c) and (d)
of the present Article, the Licensing Authority may, upon the
Holder’s request, extend the time limits provided for the above-
-mentioned paragraph if former judges that the economic conditions
do not allow for the development of a given concession.
Article 10: Development Plan
The Development Plan referred to in article 9 must, in particular,
comprise the following :
- a geological and geophysical survey of the deposit, giving
in particular an estimate of the reserves present and the
reserves shown to be recoverable.
- a study of the reservoir showing the planned production
methods and production profile .
- a comprehensive study of the plan which is required for
the production, processing ,transport and storage of hydrocarbons.
- an economic study with a detailed estimate of development
and exploitation costs, establishing the discovery’s commercial
nature .
- a study of personnel requirements with a plan for the recruitment
and training of local staff.
- a study on the valorisation of petroleum by-products, particulary
dissolved or associated gas and condensates.
- a schedule of the implementation of development work..
Article 11: Monitoring of Expenditures
The Holder is required to send the licensing Authority, in accordance
with the format agreed by the latter, a quarterly activity and
expenditure report as an annual report on activities and expenditure
undertaken within the framework of annual program and budgets
which have been submitted to the Licensing Authority.
The Holder is required to communicate to the Licensing Authority
without delay any contracts for the supply of services, work
or materials which are for an amount of over 100,000 Dinars.
The Licensing Authority may ask the Holder for any supporting
documents with the regard to expenditures including that incurred
by the parent company and/or affiliate companies in the same
group as the latter.
Article 12 : Technical Regulations
Exploration and production work must be carried out in accordance
with the current technical regulations or, failing that, in
accordance with the appropriate regulations as per the sound
practices of the international petroleum and gas industry. The
Minister of Energy and Mines sets by Order the technical regulations
governing the exploration and production of hydrocarbons, particularly
with regard to the conservation of natural resources, the Licensing
Authority in compliance with current regulations and the sound
practices of the Petroleum industry.
PART II : PARTICIPATION OF ENTREPRISE
TUNISIENNE D’ACTIVITES PETROLIERES
Article 13 : Participation option
Entreprise Tunisienne d’Activités Pétrolières is entitled
to participate in any exploitation concession at a rate decided
by Entreprise Tunisienne d’activités Pétrolières within the
limits of the maximum rate agreed upon in the Special Convention.
The terms are defined in a Contract of Association or Entreprise
or any other type of petroleum agreement approved by the Licensing
Authority .
The participation option is forfeited by Entreprise Tunisienne
d’Activités Pétrolières six (6) months at the latest after the
date of notification of development or any later date agreed
upon in the agreement above mentionedor contact .
Article 14 : Participation in Expenditures
Exploration and evaluation expenditures are incurred at the Holder’s
sole cost and risk. As soon as it gives notice of its Participation
in a concession, Entreprise Tunisienne d’Activités Pétrolières
bears the cost of its quota of development and exploitation expenses
up to its rate of participation in the concession in question
.
Article 15 : Reimbursement of Expenditures
In the event that it participates, Entreprise Tunisienne d’Activités
Pétrolières, reimburses its quota of initial expenditures incurred
by the Holder at it's sole cost and risk which has still not
been amortized byit's agreement to participate .
The expenditures in question are the sum of :
a/ Exploration and evaluation expenditures undertaken by the
Holder in the permit area since the date on which the permit was
established if it is the first concession, and since the date
of filing the application for the previous concession if it is
not the first concession, and
b/ Development expenditures incurred by the Holder in relation
to the deposit located within the concession , from the date
of filing the application for a concession to the date on which
Entreprise Tunisienne d’Activités Pétrolières gives notice of
its participation .
Entreprise Tunisienne d’Activités Pétrolières reimburses its
quota of the above-mentioned expenditures by deducting a percentage
of its production quota, in compliance with the terms specified
in the Contract of Association or Agreement mentioned in Article
13.
PART III : FISCAL AND FINANCIAL
PROVISIONS
Article 16 : Fiscal Regulations specific to
Hydrocarbons
Hydrocarbon exploration and production activities are subject
to the payment of the following duties, taxes and levies:
a/ Set duty and registration duty for permits and concessions,
in compliance with the provisions of the Decree on Mines dated
January 1,1953 ;
b/ A Royalty in proportion with the value or quantities of hydrocarbons,
in compliance with the provisions of the Special Conventions;
c/ A tax on the profits deriving from hydrocarbons, such profits
being determined either in compliance with the provision of
the Special Convention, or in accordance with the optional and
statutory regulations provided in Articles 20 and 31 of the
present Decree-Law .
d/ Payments to the State, public and private organizations,
agencies and institutions and to concessionaries of public services,
in remuneration for the direct or indirect utilization by the
Holder of public roads and other networks or of public services
in compliance with the terms and conditions of utilization defined
under the special conventions;
e/ The duties, tax and levies paid by the suppliers of services,
materials or equipment which are normally included in the purchase
price, excluding, however, income tax;
f/ Tax on customs procedures (T.F.D) due on imports and exports;
g/ The registration of supply, works and service contracts for
exploration, evaluation, development, production, transport, storage
and marketing, in accordance with the set duty ;
h/ Notwithstanding the above provisions the present Article
, the Holder is, for exploration work, compelled to pay the
tax on customs procedures (T.F.D) due on importation and exportation
of all equipment and materials allocated to these works as per
the tariff by weight.
Notwithstanding the provisions provided for Article 16 (a)
of the Code governing the Income tax on Profits of the companies,
the Holder’s mother company is exempted from the tax on the
royalty for studies, and technical assistance carried out directly
by the latter on behalf of its subsidiary company in Tunisia.
In return for the payment stipulated under the present article
hereto, the Tunisian Government exempts the Holder from all
direct or indirect levies, taxes, duties and tariffs already
introduced by the Tunisian Government and/or all other public
institutions or organisations with the exception of those listed
in the present Article .Dividends distributed to the Holder’s
shareholders are exempt from tax .
Article 17 : Calculation of taxable Profit
Taxable profits are calculated separately for each concession
.
The calculation for taxable profit is made in the same way as
for the proportional license tax in compliance with the rules
set by the Licence Code and any possible amendments made thereto
under the Special Conventions as well by this Decree-Law.
For the purpose of the previous paragraph :
a/ The duties, levies, taxes, and tariffs mentioned in paragraphs
(a), (b), (d), (e), (f) and (g) of article 16 of the said Decree-Law
are taken to be deductible costs.
b/ The exploration and evaluation expenditures incurred in a
permit may be amortized, at the Holder’s option, over all the
concessions deriving from the same permit.
Should production be stopped in a concession, the development
costs relating to this concession which still have to be amortized
over other concessions in the same permit.
c/ Interest on loans for development investment is only considered
to be a deductible cost for an amount not in exceding 70% of
the loan. The conditions of the loan contracted by the Holder
as well as any credits which might be granted to the latter
must be approved by the Licensing Authority.
d/ The Holder is entitled to build up a reinvestment reserve
exclusively intended to finance subscription for equity in new
companies in the agricultural and/or industrial sectors other
than that of hydrocarbon exploration and production. This reserve
may be deducted from taxable profit for the fiscal year in question
up to the limit of 20 % of such profit .
The reserve built up during a given fiscal year which has not
been reinvested in full or part within five years from the date
on which it was established must be reincorporated into the taxable
earnings of the fifth fiscal year following the fiscal year in
which it was established. The corresponding tax will bear a rate
interest equal to that applied by the Central Bank of Tunisia
for short term overdrafts on the date of payment , increased by
two (2) points.
This interest will be calculated for the period running between
the date on which the tax should normally have been paid and the
date on which it is actually paid .
e/ The prices to be taken into consideration for the calculation
of taxable profit are actual market prices as defined under the
Special Conventions.
f/ The tax is paid quarterly within three (3) months of the
end of a calendar quarter, on the basis of provisional balance
sheets. Final settlement within six months at the latest after
the end of the fiscal year in question.
However, if the Holder establishes that one or more hydrocarbon
discoveries located on one or more permits are not commercially
exploitable on an individual basis, the Licensing Authority may
make an exception and authorize them to be grouped together in
order to enable them to be exploited.
The Licensing Authority may, for the same reasons, authorize
hydrocarbon discoveries located on permits belonging to different
Holders to be grouped together.
Article 18 : Transfer to the Domestic Market
In order to meet Tunisia’s domestic comsumption requirements,
the Licensing Authority has the priority right to purchase a share
of the liquid hydrocarbons produced and extracted by Holder in
its concessions in Tunisia. The quantities to be delivered to
the domestic market are calculated in proportion to the quantities
produced by each concession up to a maximum of 20%.
The price for such sales is the FOB price obtained by the Holder
export sales, reduced by 10%.
If the Licensing Authority uses its priority purchasing right,
the Holder is required to make the corresponding deliveries in
accordance with the conditions specified in the notification.
Deliveries made in this way are considered to be local sales,
particularily with regard to foreign exchange procedures, and
are paid in Tunisian Dinars.
Article 19 : Exchange, Control, Regulations
The Holder undertakes to comply with Tunisian foreign exchange
regulations as amended by the provisions of the Special Conventions.
The Holder benefits from the following provisions :
a/ For hydrocarbon exports, the Holder transfers back to Tunisia
each month funds kept abroad of an amount equal to that due to
the Government of Tunisia and to that of local running costs in
the event that the Holder does not have sufficient funds available
in Tunisia.
b/ Adjustments are made as a function of positions or balances
showing the Holder’s cash available in Dinars in Tunisia, the
credit balance being transferred in accordance with the provisions
of the Special Conventions. These adjustments are made every four
months for concessions which are mainly for the exploitation of
gas for the requirements of the domestic market, and every six
months for all other concessions.
c/ The Holder is authorized to use procedures of the sale
of gas from concession developed for requirements of the domestic
market in order to settle development and exploitation costs
for this concession in compliance with exchange procedures applied
to resident exporters within the framework of Law n° 72-38 dated
27 April 1972 setting up special regulations for export industries.
PART IV: FISCAL OPTION FOR LIQUID
HYDROCARBONS
Article 20 : Special Fiscal Regulations
The Holder may, for each concession, opt for special fiscal regulations
specified below; the option for applying the latter regulations
to a concession must be exercised with the Holder’s notification
of the development of the concession in question.
The special fiscal regulations cover amortization, the proportional
royalty and the tax on profit which are established in accordance
with the ratio ( R ) of accrued net earnings to total accrued
expenditures for the concession in question.
The expression « accrued net earnings » means the sum of the
gross income of all fiscal years, reduced by the amount of tax
and levies due or paid for all fiscal years preceding the year
in question for the concession in question.
The expression « accrued total expenditures » means the sum
of all exploration and evaluation costs incurred on the permit
and all development and exploitation costs for the concessions
in question , except for taxes and levies due or paid by Holder
for the exploitation thereof, it is pointed out that exploration
expenditures incurred in the permit and taken into consideration
in determining the ratio ( R ) for a given concession is no
longer to be considered when determining the afore stated ratio
for other concessions.
It is understood that amortization relating to the concession
as well as all types of resorption are not taken into consideration
when calculating the sum of the above mentioned costs.
a/ The Holder has the option of amortizing all his capitalized
investments at a rate of up to 30% year.
b/ The proportional royalty due varies with the R ratio :
2% for R less than or equal to 0.5. 5% for R exceeding 0.5 and
less than or equal to 0.8 7% for R exceeding 0.8 and les than
or equal to 1.1 10% for R exceeding 1.1 and less than or equal
to 1.5 12% for R exceeding 1.5 and less than or equal to 2.0 14%
for R exceeding 2.0 and less than or equal to 2.5 15% for R exceeding
2.5
c/ The rate of Income Tax on Profits due varies with the R Ratio
:
50% for R less than or equal to 1.5 55% for R exceeding 1.5
and less than or equal to 2.0 60% for R exceeding 2.0 and less
than or equal to 2.5 65% for R exceeding 2.5 and less than or
equal to 3.0 70% for R exceeding 3.0 and less than or equal to
3.5 75% for R exceeding 3.5
PART V: SPECIAL PROVISIONS FOR
NATURAL GAS
Article 21 : Natural Gas and Commercial Gas
For the purpose of applying this decree-Law, Natural Gas refers
to a blend of hydrocarbons existing in the reservoir in a gaseous
state or dissolved in petroleum in reservoir conditions, Natural
Gas includes gas associated with petroleum, gas dissolved in petroleum
and gas not associated with petroleum.
By Commercial Gas is meant a natural gas from which liquids
and possibility gases which are not hydrocarbons have been extracted
with a view to making them suitable for consumption in accordance
with specifications agreed upon between the vendor and the purchaser
of commercial gas and in compliance with statutory regulations.
Article 22 : Order of priority in the utilization
of Gas
The order of priority in the utilization of gas is as follows:
1/ Use by the Holder for his own requirements on extraction
sites or in processing plants for production operations and/or
reinjection in the Holder’s fields.
2/ To meet the needs of the Tunisian domestic market. 3/ Export
either (while) or after being transformed into by-products.
Article 23 : Export of Gas
The Holder is free to dispose of his share of natural gas
after meeting the requirements stated in paragraphs 1) and 2)
of Article 22 , particularly with a view to exporting it while
transforming it into by-products.
The Holder may undertake an isolated export project for a gas
field, group all his fields producing gas for export in an integrated
project, or form a group with other Holders to undertake a joint
gas export project.
Provided that accounts are kept for gas, the Licensing Authority
undertakes to give the Holder access to any gas transport or
processing facilities belonging to the Government of Tunisian
State-Owned Company against reasonable remuneration when such
facilities have vailable capacity or when an extension of their
capacity may be carried out by minor modifications or reinforcements.
When granting authorizations for the construction, exploitation
or development of plant for the transport or processing of gas,
the Licensing Authority will make every endeavour to favor both
the undertaking of joint plant and access for the Holder on reasonable
terms, for the purpose of exporting his gas to plant undertaken
before the latter’s concession was brought into production .
A Holder who has an existing plant or solicits to build a
new plant may not refuse one or more Holders nominated by the
Licensing Authority for access to his plant. In the latter event,
the Holder may opt either to make the newcomers partners to
the project, participating in the investment and exploitation
expenditure, or for remuneration for his services to cover his
costs and a reasonable margin set, if necessary by arbitration
of the Licensing Authority.
Article 24 : Local utilization of gas
Natural gas of national origin has priority access to the domestic
market.
All natural gas produced from a national field is guaranteed
an outlet on the local market insofar as domestic demand allows.
Any increase in domestic demand that may be economically satisfied
from natural gas is reserved by order of priority, for following
sources.
-The production of Holders who are already established and committed
to the Licensing Authority by a program and reciprocal production/outlet
commitments.
-The production of new fields. In order to determine the priority
of access to the local market, the date of firm notification
of the evaluation of the discovery provided for in Article 25
will be taken within the bounds of the quantities thus notified.
In the event of simultaneous discoveries, the outlets available
will be shared between the applicants in proportion with the recoverable
reserves as notified by the Licensing Authority, unless one of
the two applicants withdraws in favor of the other. A Holder who
withdraws will take priority over any new applicants.
Article 25 : Notification of a Discovery
As soon as he is able to give a definitive evaluation of the
reserves present and a gas production forecast for a discovery
considered to be exploitable, the Holder contacts the Licensing
Authority in order to be informed of the quantities for which
an outlet may be guaranteed on the domestic market.
Within six months of such notification, the Authorities inform
the Holder of the quantities for which they can guarantee an
outlet in accordance with the conditions defined below. A commitment
thus taken by the Licensing Authority is only valid if the Holder
undertakes the evaluation program mentioned under Article 28
within six months and if he notifies his decision to develop
within four years as from the notification date of the discovery.
Article 26 : Transfer of the Discovery
For the permit which is valid, the Holder does notify his
decision to develop within four years of making a discovery
which produces economically exploitable quantities of gas after
satisfying the Holder’s own needs, the Licensing Authority may
require that the Holder transfers the discovery to Entreprise
Tunisienne d’Activités Pétrolières.
In return, Entreprise Tunisienne d’Activités Pétrolières will
pay the Holder each year 20% of the exploitation profit calculated,
on the basis of the development and exploitation expenditure
incurred by Entreprise Tunisienne d’Activités Pétrolières in
the field.
Entreprise Tunisienne d’Activités Pétrolières is released from
any commitments vis-à-vis the Holder once its reimbursements
have reached the equivalent of one and a half times the amount
of expenditure undertaken by the Holder resulting in the discovery
of gas.
The following are considered to be expenditures directly related
to the discovery :
1/ Evaluation costs following the discovery of the productive
structure.
2/ Drill hole(s) which have brought the structure to light as
well as drill hole(s) intended to delineate the structure in question,
even if they were undertaken after encountering the first shows.
3/ A quota of the seismic, geophysical or other exploration
costs incurred in the permit. This quota is proportionate to the
number of holes drilled in relation to the structure in question,
related to all the holes drilled in the permit on the date on
which it was decided to transfer the discovery to Entreprise Tunisienne
d’Activités Pétrolières.
The Holder has the option of renouncing the lump-sum reimbursement
defined above and of keeping all the expenditure in his acounts
in order to amortize it in later discoveries.
Article 27 : Associated Gas or Dissolved Gas
Should the Holder not foresee the economic exploitation of
associated gas and dissolved gas in his development plan mentioned
in Article 10, the Licensing Authority may request the Holder
to assign this gas free of charge as it leaves the hydrocarbon
separation and processing station, without any further investment
for the Holder.
The Licensing Authority may request the Holder to provide certain
equipment in order to be able to recover gas, the corresponding
investment being charged to the Licensing Authority.
Article 28 : Evaluation Program
As soon as an agreement on a production/outlet program has
been concluded between the Licensing Authority and the Holder,
as provided for in Article 25 , the Holder is required to carry
out at his own expense a full program to evaluate the gas discovery,
at the end of which he submits to the Licensing Authority a
technical and economic report comprising the elements mentioned
in the development plan specified in Article 10 .
The Licensing Authority may have the proven reserves as well
as the production profile certified by a bureau of independant
consultants of its choice and at its expense; in this case, the
Holder is required to supply the consultants bureau selected by
the Licensing Authority with all the requisite information and
documentation.
Article 29 : Fiscal regulations
For concessions mainly covering the exploitation of crude
oil with gas associated or dissolved the petroleum, the fiscal
regulations applicable comply with the provisions stipulated
under the Special Conventions or in Article 21 of the present
Decree-Law , except for the rate of the proportional royalty
on gas which is due in compliance with the provisions of Article
30 below.
For concessions covering mainly the exploitation of gas which
is not associated with crude petroleum, the fiscal regulations
to be applied comply with the provisions of the Special Conventions
except for the rate of the proportional royalty on gas which
is due in compliance with the provisions of Article 30 below,
However, the proportional royalty on liquid products extracted
from the concession is due in compliance with the provisions
stipulated under the Special conventions.
Article 30 : Proportional Royalty
The proportional royalty on gas varies with the R ratio:
2% for R less than or equal to 0.5 4% for R exceeding 0.5 and
less than or equal to 0.8 6% for R exceeding 0.8 and less than
or equal to 1.1 8% for R exceeding 1.1 and less than or equal
to 1.5 9% for R exceeding 1.5 and less than or equal to 2.0 10%
for R exceeding 2.0 and less than or equal to 2.5 11% for R exceeding
2.5 and less than or equal to 3.0 13% for R exceeding 3.0 and
less than or equal to 3.5 15% for R exceeding 3.5
Article 31 : Tax on Profit
The income Tax on Profit withdrawn from a concession dealing
principally with exploitation of gas not associated with oil,
varies with the R ratio:
50% when R is less than or equal to 2.5. 55% when R is exceeding
2.5 and less than or equal to 3.0. 60% when R is exceeding 3.0
and less than or equal to 3.5. 65% when R exceeding 3.5.
For the calculation of the income Tax on Profits, the Holder
has the option of amortizing his capitalized investments at a
rate up to 30% per year.
Article 32 : Contract of Assignments to Domestic
Market
In the event that the Licensing Authority and the Holder agree
to develop a discovery totally or partly intended for the domestic
market, a supply contract is drawn up under the aegis of the Licensing
Authority between Holder and the agency responsible for distributing
the gas in Tunisia, as appointed by the Licensing Authority.
The contract for the supply of gas must define the obligations
of the contracting parties with regard to the delivery and removal
of commercial gas, these obligations being agreed upon on an equitable
and reciprocal basis between the vendor and the purchaser.
The contract must in particular specify the period of the reciprocal
commitment, the quantities, quality standards and delivery point
for the commercial gas.
If the contract is concluded on a long term basis and the
development of the discovery intended mainly for the domestic
market, the above mentioned contract, upon the Holder’s request,
comprises a clause requiring the purchaser to pay part of the
price should he fail to remove the quantities specified under
the contract.
In the latter event, the contract must stipulate a reciprocal
commitment to deliver the gas or an undertaking to compensate
the purchase in the event of failure to deliver the amounts
under contract. This obligation to pay compensation is nonetheless
restricted to three consecutive years. If the failure to deliver
persists beyond three years, the purchaser is released from
the obligation to pay for gas which is not delivered.
The payment of gas deliveries to the local market will be
made in Tunisian Dinars and in foreign currencies in proportions
which will be fixed in the purchase and sale contracts concluded
between the Holder and the Organization in charge of the gas
distribution in Tunisia.
Article 33 : Transfer Price for Local Market
For the needs of the domestic market, the Licensing Authority
guarantees to Holder an outlet for commercial gas at a price equivalent
to 85% of the international FOB export price in Mediterranean
port for fuel oil with high sulphur content and of fuel quantity.
This price is determined with equal heating value for commercial
gas delivered to the entry point of the principal gas transport
network. Should the gas be transferred at an upstream delivery
point, the transfer price is adjusted accordingly.
Thus the guarantee of price is valid for the utilization of
gas as a fuel. For its utilization as a raw material, the price
is defined by mutual agreement between the Licensing Authority
and the Holder in such a way as to guarantee the latter fair
remuneration whilst respecting the specific economic constraints
of the industry utilizing it. The Holder may request the Licensing
Authority to set this price prior to the evaluation and development
of the discovery.
Article 34 : Derivatives and Associated Products
The Holder has the right to extract products derived from or
associated with gas such as gasoline and liquefied gas; this extraction
must however be compatible with the purchaser’s legitimate requirements
with regard to continuity of supply and the specifications of
the commercial gas. Gasoline is considered to be a liquid hydrocarbon
and may be blended with crude petroleum, unless there is a prohibition
by the Licensing Authority.
Liquefied Petroleum Gas (LPG) will be considered as being a
liquid hydrocarbon and may be sold on the local market. The transfer
price of LPG at the nearest Tunisian port is equal upstream deliveries,
the transfer price is adjusted accordingly.
PART VI : PRODUCTION SHARING
CONTRACTS
Article 35 : Purpose
The activities under the present Decree-Law may be carried
out in the framework of a service contract referred to as «
production sharing ».
Article 36: Principles Governing Production
Sharing Contracts
Production sharing contracts are concluded in compliance with
the following principles:
a/ The exploration permit and the exploitation concession mentioned
under Articles 7 and 9 are awarded to Entreprise Tunisienne
d’Activités Pétrolières.
b/ Entreprise Tunisienne d’Activités Pétrolières, as Holder,
concludes a Production Sharing Contact with a contractor which
proves that it possesses the necessary financial resources and
technical experience. This contractor may either be a company
or group of companies, one of which has the responsibility of
Operator.
c/ The contractor finances at its own risk and expense all
exploration evaluation, development and exploitation work and
conducts it on behalf of Entreprise Tunisienne d’Activités Pétrolières
under the control of the latter.
d/ If hydrocarbons are produced, Entreprise Tunisienne d’Activités
Pétrolières gives the Contractor a percentage of this production
in order to reimburse expenditure incurred by the latter in the
context of the contract, until the said expenditure has been reimbursed.
e/ Entreprise Tunisienne d’Activités Pétrolières gives the Contractor
an agreed percentage of the remainder of the production as remuneration.
f/ The Contractor is subject to the payment of the duties
and taxes mentioned in Article 16 with the exception of those
provided for in paragraphs a/ and b/.
With regard to the tax on profits, it may be settled, in acordance
with what has been agreed upon, either directly by the Contractor
or by Entreprise Tunisienne d’Activités Pétrolières on behalf
of the Contractor.
In the latter event, the percentage of production finally kept
by Entreprise Tunisienne d’Activités Pétrolières includes a percentage
corresponding to the amount of this tax.
PART VII : OPTION FOR CURRENT
PERMITS
Article 37 : Option given to Holders
Holders of permits for the exploration of mineral substances
of the second group which are currently valid have the right
to opt for the application of the provisions of this Decree-Law.
However concessions established and development prior to the
date of promulgation of this Decree-Law are excluded from the
application of the above-mentioned option.
Article 38 : Use of Option
The Holder must accept the option in Article 37 of June 30,
1987.
Article 39 : Application of the law to Current
Permits
For discoveries prior to the promulgation of the present law:
a/ The deadlines of 3 and 4 years for carrying out discoveries
appraisal programs are meant as from the date of July 1st, 1987.
b/ The deadlines of 6 and 8 years for the transfer of liquid
and gaseous hydrocarbons discoveries are meant as from the date
of July 1st, 1987.
c/ The date of notification of the discovery mentioned in Article
25 is fixed at June 30th, 1987.
Article 39 (a) : Foreign Personnel Regime
For the exploration work, the Holder may hire freely the senior
staff of foreign nationality.
The personnel of foreign nationality being non-resident prior
to their hiring or secondment to Tunisia and assigned to the exploration
work may:
- Choose a system of Social security other than the Tunisian
regime, in which case the employee and the employer are not compelled
to pay the Social Security contribution in Tunisia.
- Benefit from the exemption of Income Tax of Wages, and Salaries
of the Personnel Contribution to Government, as well as the «
Contribution of Solidarity » due on wages and salaries which are
based upon the latter. He is, in return, subject to a fiscal contribution
fixed at 20% of the total amount of his remuneration.
The benefit of these provisions is subject to the presentation
of an attestation from the Ministry of Energy and Mines.
The personnel of foreign nationality employed by the Holder
during the exploration phase benefits from the regime of exemption
of duties and taxes for the importation of his personal effects
and a car for each of his personnel. The transfer to a resident
person of the imported vehicle and or belongings is subject to
the formalities of External trade and to the payment of duties
and taxes in force at the date of the transfer, calculated on
the basis of the value of the vehicle or of the belongings on
that date.
Article 39 ( b) : Application to General
Contractor
The provisions of the aforementioned Decree-Law n°85-9 of 14
September 1985, as well as those of the present Law, will apply
also to any general Contractor recognized by the Licensing Authority
and which substitutes for Holder in conducting exploration and/or
exploitation operation.
PART VIII : FINAL PROVISIONS
Article 40 : Application of the aforementioned
Decree law
For permits granted after the promulgation of the said Decree-Law,
prior provisions, particularity those under the Decree of December
13, 1948 establishing special provisions to facilitate the exploration
and exploitation of mineral substances of the second group,
those under the Decree on Mines dated January 1, 1953, those
under Law n° 58-36 dated March 15, 1958 amending the royalty
on hydrocarbons, only apply to the Holder who is not in contradiction
or incompatible with the provisions there of.
Article 41 :
The provisions of the aforementioned Law n°87-6 of 6 March
1987 will apply to the Holder having opted for the application
of the provisions of the Decree-Law n° 85-9 of 14 September
1985, unless written objection is expressed by him.
Article 42 :
All previous provisions contrary to the aforementioned Law n°87-9
of 6 March 1987 are abrogated, which Law becomes effective one
month as from date of its promulgation.
The present Law will be published in the « Journal Officiel
de la République Tunisienne » (Official journal of the Republic
of Tunisia ) and executed as Law of the State.
