Oil Regulation
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® Oil Regulation in 29 jurisdictions worldwide Contributing editor: Ron Deyholos 2010 Published by Getting the Deal Through in association with: Adly Bellagha & Associates Æ´LEX Legal Practitioners and Arbitrators Aequitas Law Firm Al Busaidy, Mansoor Jamal & Co Ali & Partners Baker & McKenzie – CIS, Limited Bech-Bruun Blake, Cassels & Graydon LLP Borgia & Co Chandler and Thong-ek Law Offices Limited CMS Adonnino Ascoli & Cavasola Scamoni CMS Bureau Francis Lefebvre CMS Cameron McKenna Dr Jamal Seifi & Associates Dr Kamal Hossain and Associates Hoet Peláez Castillo & Duque Abogados Kelemenis & Co Martelli Abogados Moreno Baldivieso Estudio de Abogados Pillsbury Winthrop Shaw Pittman LLP Rex Attorneys Saah Partners Skrine Thompson & Knight LLP TozziniFreire Advogados contents ® Oil Regulation Algeria Samir Sayah CMS Bureau Francis Lefebvre 3 2010 Argentina Hugo C Martelli Martelli Abogados 8 Contributing editor: Azerbaijan Aykhan Asadov and Mahmud Yusifli Baker & McKenzie – CIS, Limited 13 Ron Deyholos Blake, Cassels & Graydon LLP Bangladesh Sharif Bhuiyan and Abdullah Mahmood Hasan Dr Kamal Hossain and Associates 18 Business development manager Joseph Samuel Bolivia Luis Moreno Gutiérrez Moreno Baldivieso Estudio de Abogados 22 Marketing managers Brazil Pedro G Seraphim and Heloisa F Andrade Scaramucci TozziniFreire Advogados 27 Alan Lee George Ingledew Canada Dufferin Harper and Taryn Petrovich Blake, Cassels & Graydon LLP 32 Robyn Hetherington Dan White Denmark Per Hemmer, Johan Weihe, Per Vestergaard Pedersen and Rania Kasis Bech-Bruun 39 Tamzin Mahmoud Ellie Notley Faroe Islands Per Hemmer, Johan Weihe, Per Vestergaard Pedersen and Rania Kasis Bech-Bruun 44 Subscriptions manager France Denis Borgia Borgia & Co 50 Nadine Radcliffe Subscriptions@ Ghana Jacob Arko Saah Saah Partners 54 GettingTheDealThrough.com Greece Yannis Kelemenis Kelemenis & Co 58 Assistant editor Adam Myers Greenland Per Hemmer, Per Vestergaard Pedersen, Johan Weihe and Rania Kassis Bech-Bruun 63 Editorial assistant Nina Nowak Iran Jamal Seifi and Shahbiz Shafe Dr Jamal Seifi & Associates 70 Senior production editor Italy Pietro Cavasola and Matteo Ciminelli CMS Adonnino Ascoli & Cavasola Scamoni 77 Jonathan Cowie Kazakhstan Olga Chentsova, Natalya Braynina and Valikhan Shaikenov Aequitas Law Firm 84 Chief subeditor Kuwait Reema Ali and Khaled Al-Qaneh Ali & Partners 91 Jonathan Allen Senior subeditor Malaysia Faizah Jamaludin Skrine 96 Kathryn Smuland Subeditors Mexico Mayuca Salazar Canales and Gabriel Ruiz Rocha Thompson & Knight LLP 102 Ariana Frampton Charlotte Stretch Nigeria Soji Awogbade and Sina Sipasi Æ´LEX Legal Practitioners and Arbitrators 108 Editor-in-chief Oman Rory Gilchrist and Mansoor J Malik Al Busaidy, Mansoor Jamal & Co 113 Callum Campbell Publisher Russia Alexey Frolov and Alexander Gomonov Baker & McKenzie – CIS Limited 118 Richard Davey Tanzania Alex T Nguluma and Zaharani O Sinare Rex Attorneys 122 Oil Regulation 2010 Thailand Albert T Chandler and Chantima Limpananda Chandler and Thong-ek Law Offices Limited 127 Published by Law Business Research Ltd Tunisia Adly Bellagha Adly Bellagha & Associates 132 87 Lancaster Road London, W11 1QQ, UK Ukraine Svitlana Romanova Baker & McKenzie – CIS, Limited 136 Tel: +44 20 7908 1188 Fax: +44 20 7229 6910 © Law Business Research Ltd United Kingdom Bob Palmer and Matthew Culver CMS Cameron McKenna 143 2010 United States Robert A James, Stella Dorman and Joseph H Fagan No photocopying: copyright licences do not apply. Pillsbury Winthrop Shaw Pittman LLP 150 ISSN 1744-0939 Venezuela Miguel Rivero and José Alberto Ramírez Hoet Peláez Castillo & Duque Abogados 158 The information provided in this publication is general and may not apply in a specific situation. Legal advice should always be sought before taking any legal action based on the information provided. This information is not intended to create, nor does receipt of it constitute, a lawyer–client relationship. The publishers and authors accept no responsibility for any acts or omissions contained herein. Although the information provided is accurate as of July 2010, be advised that this is a developing area. Printed and distributed by Encompass Print Solutions Tel: 0870 897 3239 Law Business Research Bech-Bruun GREENLAND Greenland Per Hemmer, Per Vestergaard Pedersen, Johan Weihe and Rania Kassis Bech-Bruun General the Kângamiut-1 well. A licensing round for areas offshore West Greenland was held 1 Describe, in general terms, the key commercial aspects of the oil in 1992 to 1993. As no applications were submitted, an open-door sector in your country. licensing policy was introduced in 1994. It covered both onshore and Greenland is the world’s largest island. Its land area is 2.2 million offshore areas south of 70°30’N in West Greenland and Jameson square kilometres, but 1.8 million square kilometres are covered by Land in East Greenland. the Greenland ice sheet. The northernmost extremity of Greenland Subsequent investigations were carried out by Nunaoil – a com- is Cape Morris Jessup which is also the northernmost land area in pany then owned jointly by Greenland under home rule and the Dan- the world, situated less than 730 kilometres from the North Pole. ish state and now owned by Greenland as part of its self-government. Greenland has a population of 56,000 inhabitants. The investigations confirmed the existence of cross-cutting reflectors Greenland is an autonomous part of the Kingdom of Denmark (CCR’s). Based on these discoveries, a licence was awarded in 1996 (the ‘Community of the Realm’) which comprises Denmark proper, to a consortium consisting of Statoil, Phillips Petroleum, DONG Greenland and the Faroe Islands (an island group situated about half and Nunaoil. In 1998, a new licence was awarded to the same way between Scotland and Iceland). participants. Greenland had home rule from 1979 to 21 June 2009 when Licensing rounds were held in 2001, 2002, 2004, 2006 and 2007. it obtained self-government after a referendum and negotiations In April 2008, an open-door licensing procedure was launched. It with the Danish government. The Danish Act No. 473 of 19 May covered offshore areas in West Greenland and around Cape Farewell, 2009 on Greenland Self-Government entered into force on 21 June the southernmost extent of Greenland. On 1 January 2010, it was 2009. Greenland has extensive self-government under the act, succeeded by an open-door licensing procedure under the present which for most areas of government either transferred or provides Greenland Mineral Resources Act. The 2010 open-door licensing for the transfer of the legislative power from the Danish parlia- procedure covers offshore areas in the southern part of West Green- ment to the Greenland parliament (Inatsisartut) and the executive land and around Cape Farewell and onshore areas in Jameson Land power from the Danish government to the Greenland government in East Greenland. (Naalakkersuisut). In October 2009, the Greenland government issued an invitation As part of its self-government, Greenland owns and has the right to apply for licences for exploration and exploitation of oil and gas of disposal of all mineral resources, including oil and gas, in its land, in two licensing rounds: the Baffin Bay Licensing Round 2010 cov- territorial sea and continental shelf areas. Under the Greenland Self- ers offshore areas of 151,358 square kilometres in West Greenland. Government Act, it may determine that all legislative and executive The areas are three times the area of Denmark proper. The areas powers in the mineral resources area including oil and natural gas have been divided into 14 blocks of sizes between 8,000 km2 and shall be transferred from the Danish state. The transfer was decided 15,000 km2. By the application deadline on 1 May 2010, the Bureau by the Greenland Parliament on 23 October 2009 and became effec- of Minerals and Petroleum had received 17 applications from 12 tive on 1 January 2010. In connection with the transfer of powers, international oil companies, including some of the world’s major the former Danish Act on Mineral Resources in Greenland – which oil companies. regulated prospecting, exploration and exploitation of oil, gas and The Greenland Sea Licensing Round 2012-13 covers offshore minerals – was repealed and replaced by the present Greenland Par- areas of 50,000 square kilometres in East Greenland. Companies liament Act No. 7 of 7 December 2009 on Mineral Resources and which are members of the Kanumas Group (Statoil, BP, Esso, Chev- Activities of Importance Thereto (Mineral Resources Act). The main ron, Shell, JOGMEC and Nunaoil) may submit applications for provisions on oil and gas licences in the present Greenland mineral licences in a special pre-round no later than 15 December 2012. resources act are based on and correspond to the provisions on such The pre-round covers areas of 30,000 square kilometres designated licences in the former Danish Mineral Resources Act. All prospect- by the Greenland government in the ordinary round area of 50,000 ing, exploration and exploitation licences granted under the former square kilometres. After licences have been granted in the pre-round, Danish act are still effective but are now governed by the present any company may submit applications for licences in the remaining Greenland act (see section 98(4)). parts of the ordinary round areas in a subsequent ordinary licence Exploration for oil and gas began in the early 1970s in areas round. The deadline for submission is 15 October 2013. offshore