Property rights
In general, crude oil and natural gas resources are the property of the government of the country in which they are located. An oil and natural gas exploration company generally does not own the rights to discovered oil and gas but instead receives permissions to explore for and produce oil from the government of the country in question. These permissions are typically called concessions, permits, production sharing contracts and licenses (“Licenses”).
They are usually divided into two parts — one for an exploration phase and a second for production. The award of a License is often done through an auction. In some cases, a fee has to be paid to the government in order to receive a License. However, the most common procedure is that oil companies pay indirectly for the rights to explore for and produce hydrocarbons by investing in exploration and development. An alternative system used by some countries is the open application system, in which oil companies can apply directly for unlicensed areas. If commercial volumes of oil or natural gas are discovered, the exploration license converts into a production license, where a royalty and/ or a tax is applicable, or a production sharing agreement, where a certain share of the recovered oil or natural gas goes directly to the country. The duration of a production license is usually 20 to 30 years.
Brunei - In Brunei, the exploration and production rights granted are set forth in the production sharing agreements entered into between exploration and production companies and the country’s national oil company, PetroleumBRUNEI. PetroleumBRUNEI manages offshore Blocks J and K and onshore Blocks L and M, which were granted to it by the Government of Brunei pursuant to the Brunei National Petroleum Company Order of 2002. Blocks J, K, L and M are covered by the production sharing agreements scheme. PetroleumBRUNEI aims to ensure that Brunei is represented in commercial petroleum activities, both nationally and internationally.
Syria - The oil and gas industry in Syria is governed by the Syrian Ministry of Oil and Gas. Under the terms of National Law No. 7 (1953), petroleum resources found in the subsoil of Syria and off the Syrian continental shelf belong to the Syrian state. This legislation was supplemented by Decree 133/22 (1964), which stipulates that all petroleum activities shall be controlled by the state. The right to conduct petroleum operations within Syrian territory is granted in the form of a production sharing contract granted by the Syrian state to the contractor and SPC. SPC is entitled by Syrian law to explore, develop and invest in oil and gas projects on behalf of the Syrian government (as owner of all natural resources in Syria).
Ukraine - The regulation of hydrocarbons in Ukraine is administered by a number of bodies, including the Ministry of Fuel and Energy of Ukraine and the Ministry of Environmental Protection and the State Geology Service. All special permits are generally awarded by way of an auction. An auction does not need to be undertaken to apply for an extension of exploration and development special permits. The Ministry of Environment of Ukraine usually takes between six to nine months to grant a production special permit by way of an auction. During the transition between exploration and production special permits (which can take up to 70 days) test production must cease. Before the commencement of the production the respective gas or oil fields have to be commissioned into production by the Ministry of Fuel and Energy of Ukraine.
They are usually divided into two parts — one for an exploration phase and a second for production. The award of a License is often done through an auction. In some cases, a fee has to be paid to the government in order to receive a License. However, the most common procedure is that oil companies pay indirectly for the rights to explore for and produce hydrocarbons by investing in exploration and development. An alternative system used by some countries is the open application system, in which oil companies can apply directly for unlicensed areas. If commercial volumes of oil or natural gas are discovered, the exploration license converts into a production license, where a royalty and/ or a tax is applicable, or a production sharing agreement, where a certain share of the recovered oil or natural gas goes directly to the country. The duration of a production license is usually 20 to 30 years.
Brunei - In Brunei, the exploration and production rights granted are set forth in the production sharing agreements entered into between exploration and production companies and the country’s national oil company, PetroleumBRUNEI. PetroleumBRUNEI manages offshore Blocks J and K and onshore Blocks L and M, which were granted to it by the Government of Brunei pursuant to the Brunei National Petroleum Company Order of 2002. Blocks J, K, L and M are covered by the production sharing agreements scheme. PetroleumBRUNEI aims to ensure that Brunei is represented in commercial petroleum activities, both nationally and internationally.
Syria - The oil and gas industry in Syria is governed by the Syrian Ministry of Oil and Gas. Under the terms of National Law No. 7 (1953), petroleum resources found in the subsoil of Syria and off the Syrian continental shelf belong to the Syrian state. This legislation was supplemented by Decree 133/22 (1964), which stipulates that all petroleum activities shall be controlled by the state. The right to conduct petroleum operations within Syrian territory is granted in the form of a production sharing contract granted by the Syrian state to the contractor and SPC. SPC is entitled by Syrian law to explore, develop and invest in oil and gas projects on behalf of the Syrian government (as owner of all natural resources in Syria).
Ukraine - The regulation of hydrocarbons in Ukraine is administered by a number of bodies, including the Ministry of Fuel and Energy of Ukraine and the Ministry of Environmental Protection and the State Geology Service. All special permits are generally awarded by way of an auction. An auction does not need to be undertaken to apply for an extension of exploration and development special permits. The Ministry of Environment of Ukraine usually takes between six to nine months to grant a production special permit by way of an auction. During the transition between exploration and production special permits (which can take up to 70 days) test production must cease. Before the commencement of the production the respective gas or oil fields have to be commissioned into production by the Ministry of Fuel and Energy of Ukraine.
