Energy: Oil and Gas 2019 Comparisons

Last Updated August 09, 2019

Contributed By Ferchiou & Associés

Law and Practice

Authors



Ferchiou & Associés has its head office in Tunis, comprised of 75 total staff including lawyers, tax advisors and legal support. The firm’s expertise in the oil and gas sector includes: hydrocarbon titles transfer and acquisitions; upstream and downstream legal advice on oil project financing; environmental due diligence; regulatory compliance and policy; counsel to the Tunisian government, major state-owned companies, and multinationals. The firm also holds expertise in M&A, financing, contract review, labour and employment and tax. FA's relevant recent deals include: providing legal advice to Panoro SA in relation to its acquisition of DNO Tunisia SA and Petrofac in relation its acquisition of Perenco; acting as legal advisor to OMV in the context of its activities in Tunisia; and acting as legal advisor to Carlyle International Energy Partners relative to the transfer of the interests held by Medex Pétroleum.

All petroleum located in the subsoil of the Tunisian territory, including in Tunisian maritime areas, is considered as a national asset which is part of the Tunisian State public domain.

The Ministry of Energy and Mines (currently attached to the Minister of Industry and Small and Medium Sized Enterprises (MI) is the authority in Tunisia responsible for the supervision of the hydrocarbons sector and granting permits. The General Directorate for Hydrocarbons (DGH) is the body in charge of implementing the states policies in hydrocarbons field.

National Oil Company

L’Entreprise Tunisienne d’Activité Pétrolière (ETAP) is the national oil company in Tunisia.

ETAP was created by Law No 72-22, dated 10 March 1972, and does not hold regulatory authority. ETAP’s main purpose is:

  • the training of Tunisian executives in the various branches of the oil industry; and
  • the possible involvement in all industrial, commercial, financial, movable or immovable operations directly or indirectly related to petroleum.

ETAP participates in all prospecting and research permits as these permits can only be granted in association with it.

National Gas Company

Société Tunisienne de l’Electricité et du Gaz (STEG) is the national gas company in Tunisia. STEG was created by Law No 62-8, dated 3 April 1962, and does not hold regulatory authority. STEG is in charge of the production, transport, distribution, import and export of electricity and gas.

Tunisian Hydrocarbon’s framework varies from a petroleum title to another depending on the date of its granting and the tax and legal treatment that the title holder has elected for the implementation of its title. Consequently, the principal petroleum laws and regulations are the following.

Decree, Dated 13 December 1948

Decree dated 13 December 1948, instituting special provisions to facilitate the research and exploitation of mineral substances of the second group which include bitumen, asphalt, oil and other solid, liquid or gaseous petroleum: the key point addressed by this Decree is the introduction of the convention and book of specifications regulating the relationship between the Tunisian state and the title-holder.

Decree, Dated 1 January 1953 on Mines

The key points addressed by this Decree are the following:

  • the creation of the consultative committee for mines;
  • setting financial provisions relating to the exploitation permit and the concession;
  • surveillance of the administration on mines.

Decree No 85-9, Dated 14 September 1985

Decree No 85-9, dated 14 September 1985, creating special provisions concerning the research and production of liquid and gaseous hydrocarbons as amended by Law 87-9, dated 6 March 1987 – the key points addressed by this Decree, as amended, are the following:

  • reduction of the duration of hydrocarbons concessions from 50 years to 30 years;
  • introduction of tax provisions ensuring a progressive tax levy based on an 'R' ratio for both the proportional royalty on production and income tax;
  • introduction of the production sharing agreement (PSA);
  • introduction of an option granted to the national oil company ETAP allowing it to participate in every concession;
  • introduction of the obligation to perform assessment works within the time limits provided by Decree No 85-9 when finding an economically exploitable discovery.

The Hydrocarbons Code

The Hydrocarbons Code, enacted by Law No 99-93 of 17 August 1999, as subsequently amended and supplemented – the key points addressed by the Hydrocarbons Code are the following:

  • introduction of provisions related to the protection of the environment;
  • reduction of administrative delays;
  • setting the conditions of ETAP participation with the title holder in the research of petroleum.

The Tunisian energy authorities are currently working on the amendment of the Hydrocarbons Code. According to the head of the General Studies Exploration Department at ETAP, the new code will be more attractive for investors and will adapt to the Tunisian national energy context. The new code will include a chapter for non-conventional energy resources like shale gas.

A private investor can obtain the right to explore, develop and produce petroleum in Tunisia by opting for one of the following hydrocarbon titles.

The Prospection Authorisation

The prospection authorisation allows the performance of preliminary prospection by using geological methods other than seismic surveys and drillings.

The Prospection Permit

The prospection permit allows the performance of prospection by using geological and geophysical methods and excludes drillings other than for geological or seismic coring with a maximum depth of 300 m.

The Research Permit

The research permit allows the performance of studies and works, as well as production tests, each of which must not exceed seven days.

Concession

The concession allows the performance of studies and works, in particular the drilling and completion of wells and the construction of the necessary installations, with a view to developing and bringing a petroleum field into production, the operations of first preparation of petroleum produced with a view to making them marketable, the transport of these hydrocarbons and their commercialisation.

The prospection permit, research permit and the exploitation concession are granted by order of the MI upon advice of the Consultative Committee for Hydrocarbons (CCH).

In order to obtain the right to prospect, research or exploit petroleum, the holder of the research and prospection permit needs to conclude with the conceding authority a convention. The convention regulates the conditions under which the prospection, research and exploitation activities will be carried out.

All permits are granted in association with ETAP through a PSA or a joint venture agreement (JVA).

The format of licences is described in 2.1 Forms of Allowed Private Investment in Upstream Interests, above.

In order to obtain an upstream licence, a private investor needs to have the appropriate financial resources and sufficient technical capacity.

As the licenses are not granted through the public bid process, the private investor will be required to file a request with the DGH according to a format provided by law.

The format of the request and the documents that need to be attached with it will differ depending on the type of upstream licence.

In addition, the private investor is required to conclude a convention with the conceding authority setting out the investor’s rights and obligations.

Proportional Royalty

The proportional royalty is paid on the quantities of petroleum produced by the title holder.

The royalty rate is determined on the basis of the (R) factor of the cumulative net revenues to the cumulative total expenses of each co-holder relating respectively to each operating concession and to the research permit from which it originates.

For liquid and gaseous petroleum, proportional royalty varies from 2% to 15%.

In case ETAP is not a participant in a concession, the rate of the proportional royalty applicable to said concession cannot be inferior to 10% for liquid petroleum and to 8% for gaseous petroleum.

Income Tax

Income tax rate for liquid petroleum varies from 50% to 75% based on the (R) factor.

Income tax generated from a concession focusing mainly on the production of gas not associated with oil varies from 50% to 65%.

In case ETAP is a participant in a concession with more than a 40% stake, the income tax rate applicable is 50%.

The typical taxes under upstream licences are divided into general taxes and taxes specific to petroleum and are provided in the Hydrocarbons Code (see 1.4 Principal Petroleum Law(s) and Regulations, above).

General Taxes

The holder of a prospection permit, a research permit or a concession as well as any contractor or subcontractor are subject during the performance of their respective interests to the payment of the following taxes:

  • registration at a fixed duty of the convention and its appendices, its addendums, further agreements, specific agreements or PSA concluded within the framework of the convention;
  • registration at a fixed duty of all supply, works and service agreements related to the holder’s activities performed under the special convention and related to petroleum research and exploitation activities;
  • payments to the Tunisian State, local authorities, public or private establishments and public service concessionaires in remuneration of the direct or indirect use by the holder of public infrastructure;
  • tax on establishments of industrial, commercial or professional nature, for the benefit of local authorities;
  • tax on constructed properties;
  • customs services fees (RDP) and the data automatic processing fees due on imports and exports;
  • taxes, duties and levies paid by the suppliers of services, goods, equipment, materials, products and raw materials or consumables which are normally included in the sale’s price, with the exception of VAT (value added tax);
  • taxes for transportation and circulation of vehicles; and
  • tax on insurances.

Taxes Specific to Petroleum

The holder of a prospection permit, a research permit or a concession is subject for his activities to the payment of the following taxes.

  • Fixed tax equal to the minimum inter-professional hourly wage of an ordinary worker for every full elementary perimeter (an area of 4 km); this tax must be paid whenever there is a request for the establishment, renewal or extension of the area of the petroleum title, with an exception for prospection authorisations.
  • Fixed tax is to be paid per hectare of land included in a concession, equal to the guaranteed inter-professional hourly wage of an ordinary worker no later than 30 June of each year; this tax is equal to five times the guaranteed inter-professional wage per hour of the ordinary worker per hectare for inactive or unexploited concessions.
  • Proportional royalty determined based on the (R) factor on the quantities of petroleum produced by the title holder paid in nature or in cash at the choice of the conceding authority under the conditions provided for in the convention.
  • Income tax determined based on the (R) factor.

The national oil company ETAP participates in all prospecting and research permits. In addition, any applicant for a prospecting or research permit must include in his application an option for ETAP to participate in any concession. The participation percentage is decided by ETAP within the maximum rate agreed in the convention authorising the prospecting, the research and the exploitation of hydrocarbons.

The title holder is required, to the extent compatible with the proper conduct of his activities, to prioritise employing in Tunisian staff. If Tunisian staff are not available, the title holder may be authorised by the conceding authority to temporarily employ foreign nationals. However, the title holder may freely recruit foreign management staff for his prospecting and research activities.

The title holder is required to prioritise use of equipment or materials produced in Tunisia and the services of Tunisian companies or subcontractors to the extent that the price, quality and delivery times are comparable. The title holder is also required to ensure the training of his Tunisian personnel in all the specialities required by his activity, in accordance with a training plan previously approved by the conceding authority.

The holder of a research permit is required to carry out, prior to the submission of the application for a concession, a programme of assessment over a period not exceeding three years if the discovery concerns liquid petroleum and four years if the discovery concerns gaseous petroleum, from the date on which the discovery is considered commercially exploitable.

Prospection Authorisation

The prospection authorisation is granted for a maximum period of one year.

The authorisation may be granted to several petitioners for the same zone.

The authorisation may be cancelled if the title holder performs any studies other than the preliminary prospection studies allowed.

At the end of the validity period of the authorisation, the title holder must have already provided the licensing authority with a copy of a copy of all studies carried out and information gathered during the execution of the work.

Prospection Permit

The prospection permit is granted for a period of two years, extendable for a maximum period of one year.

The title holder must commit to expenditures and carry out geological and geophysical works.

The MI can cancel the permit if works carried out are not those allowed by his/her specific permit.

At the end of the validity period of the permit, the title holder must have already provided the licensing authority with a copy of the seismic recordings, studies and any information collected during the execution of the work.

Obtaining of another prospecting permit or research permit is subject to compliance with the above.

Research Permit

The research permit is granted for an initial period of five years, renewable twice for a period not exceeding four years for each renewal.

The permit may be renewed a third time if the title holder discovered a hydrocarbon deposit allowing him/her to file for a concession.

The permit may be extended for an initial period of two years. Expenditure and work commitments are adjusted to take into account the extension. An additional extension may be granted for a period of one year in the event of impediments duly proven by the holder and hindering the normal conduct of his/her research activities, or if the holder commits to undertake additional work further to his initial obligations. Another extension of two years may be granted to the title holder at his/her request if he/she discovers petroleum during the last period of validity of his research permit.

The holder of a research permit may renounce his/her permit at any time, by virtue of a written declaration of renunciation, provided that he/she has fulfilled his minimum commitments of work and expenses for the period for which the renunciation was elected.

Failure to fulfil the commitments and expenses is subject to payment of compensatory indemnity to the granting authority.

Concession

The concession is granted for a period of 30 years.

The concession holder has an obligation to start developing the concession within a maximum period of two years from the date of the concession. Failing this, the conceding authority may cancel the concession and dispose of it freely without any compensation.

The concession holder has the right to dispose of the petroleum extracted from his concession, in particular for export purposes, provided that he/she fulfils his obligations and contributes to the supply of the local market.

For that purpose, the conceding authority is entitled to purchase in priority a part of the crude oil and natural gas liquids extracted by the holder from his/her concessions in Tunisia. The quantities intended for the local market are calculated in proportion to the quantities produced by each concession up to a maximum of 20%.

The holder may at any time renounce to his/her concession. After the renouncement, the concession shall return to the licensing authority without the holder being relieved of his obligations.

The holder of a prospecting permit, or a research permit and/or a concession is required to restore the returned areas and/or abandoned operating sites to their original state in such a way that no damage is caused in the short or long term to the safety of third parties, the environment and resources, in accordance with the laws and regulations in force.

The total or partial transfer of interests in a prospection permit, research permit or a concession is subject to the prior approval of the conceding authority upon advice of the CCH.

Approval is not required if the transfer occurs between affiliated companies where it is only subject to notification of the conceding authority.

Notification and approval requests are made through a template provided by law and shall include documents listed by the regulations.

There are no legal or regulatory restrictions on production rates.

Pipelines

The establishment and operation of pipelines of public interest intended for the transport of gaseous, liquid or liquefied hydrocarbons under pressure on the Tunisian territory and in maritime areas subject to Tunisian jurisdiction is subject to either an authorisation granted by decree or a concession approved by decree.

Plants

The creation of a refinery in Tunisia requires obtaining the approval of the MI upon the advice of the CCH.

Société Tunisienne des Industries de raffinage (STIR) has de facto the national monopoly for refining Petroleum.

Wholesale and Retail Marketing

Private investors can establish a company in Tunisia specialised in wholesale and retail marketing or invest in an existing one.

The established company will not be able to distribute natural gas as all quantities produced from Tunisian fields are transferred in full to the national gas company STEG which holds the monopoly of distributing natural gas.

The distribution of petroleum products requires the approval of the MI upon advice of the CCH.

Access to a downstream operation run by a national monopoly will depend whether the monopoly exist considering that there are no other companies operating in the sector of activity or because the activity is prohibited for other entities.

For example, as per law, only STEG can distribute natural gas and no other entities can perform such activity. On the other hand, any entity with the appropriate authorisations would be able to refine petroleum. In other terms there are no restrictions in law for such activity. However, in practice STIR has the monopoly to import and to refine petroleum.

The transfer price to the refinery of crude oil belonging to the State and the transfer prices of finished products leaving the refinery are fixed by reference to import prices by a special commission.

Pipelines:

The request for an authorisation or a concession needs to be addressed to the MI with a file specifying the technical, economic and financial characteristics of the future pipeline; the authorisation or concession is granted by decree issued by the Ministers' council.

Plants:

The licence is issued after the MI approves the request for an authorisation.

Wholesale and retail marketing:

The marketing licence is issued after the MI approves the request for an authorisation.

Downstream licences are subject to the ordinary tax regime as provided in 3.5 Income or Profits Tax Regime Applicable to Midstream/Downstream Operations, below.

Companies operating in the sector of petroleum refining and wholesale petroleum products are subject to corporate income tax at the rate of 35%.

The national gas company STEG is the only company allowed to distribute natural gas in Tunisia.

In Tunisia, there are no specific local content requirements regarding the use of local goods and services.

Local employment in downstream operations is governed by the Tunisian Labour Code. Pursuant to Article 258-2, the recruitment of foreign employees is not allowed in case there are Tunisian skills in the specialities concerned by the recruitment. Accordingly, priority is given to the Tunisian work force. Nevertheless, and according to the Tunisian Employment Ministry’s practice, there are two exceptions to the priority principle: (i) hiring the legal representative of a company in Tunisia; and (ii) hiring seconded foreign employees.

Main Training Programmes

There are no specific local content requirements in training programmes. In practice, private investors organise training courses through training centres.

The Radès Training Centre: the centre's main objective is to train operators, depot managers, truck drivers, technical and sales engineers, service providers working for Total's Marketing & Services Branch and its employees in the fields of oil logistics. Total chose Tunisia – and Radès in particular (the Tunis oil zone par excellence) – for this large-scale project for many reasons. Radès is recognised by the international independent organisation (BVQI) for its level of excellence in the control and management of industrial site safety.

The Oil and Gas Institute of Monastir: OGIM is accredited by the International Well Control Forum, IWCF (UK), to provide well training and inspection certificates. In addition, OGIM collaborates with referenced institutions in their respective fields – for example, KAPPA for well testing software, Schlumberger for reservoir engineering software and production, APC Training and SEA Group for process instrumentation and control, ISSAT Sousse and other renowned institutions.

General Structure of the Current Model of Downstream Licence

Downstream operations are the following: refining, recovery in refinery storage and distribution of petroleum products.

The law governing these activities does not cover all their aspects.

STIR has de facto the national monopoly for refining Petroleum.

STEG has the national monopoly on the distribution of natural gas.

Oil distribution is carried out by several distribution companies, such as Agil, Ola Energy, Shell, Staroil, and Total.

Service Obligation and Class of Service

The law provides compulsory stock obligations to each downstream distributor. Products subject to this obligation are listed within the law for each step of the downstream value chain.

Domestic Supply Requirements (and Terms)

Refiners are required to give priority to the supply of national crude oil to ensure the continuous supply of the market. The domestic supply is considered as a public service requirement. In some circumstances, private investors have the obligation to supply public services and areas are declared a priority by decree. They should also make a pre-sales check of the product's quality to be delivered and their compliance with standards in force.

Refiners, buyers and Distributors must provide proof of a compliance certificate with safety and environmental protection rules prior to the commissioning of their installations periodically and regularly, at periods set by regulatory texts according to the equipment categories.

Export Rights

There are no specific provisions on export rights regarding downstream operations.

Liability and Risk Regime

In the event of a failure in the installations condition or non-compliance with the safety regulations, the MI may, after formal notice, decide to stop all or part of the installation deemed to be defective. If the failure constitutes an imminent danger, the stopping can be pronounced without notice.

Withdrawal, Termination and Abandonment Rights and Obligations.

In case of persistence after the expiry of a period set by the Minister for compliance, the approval may be withdrawn. However there no specific provisions governing termination and abandonment rights and obligations for downstream operations.

Condemnation and eminent domain rights are not specifically regulated for downstream operations carried out by private investors.

The main infrastructures are the property of national/public companies (STEG and STIR).

The local petroleum products market must primarily be supplied with products from local production.

The downstream market is highly regulated in term of prices. Sale prices of crude oil to refinery and finished products at the end of the refinery process are set, with reference to import prices, by a commission.

Sale prices to the public on the local market on petroleum products, along with retail profit margin, are set by the Trade Minister.

Petroleum products are sold by STIR to distributors at subsidised prices.

The oil distribution cannot be made directly to the public – it must go through gas stations. The kerosene (pétrole lampant) quantities that gas stations can sell at the retail level for domestic supply are limited to 20 litres per person. It is prohibited for gas stations managers to supply cars, trucks, industrials and professionals with kerosene.

The Hydrocarbons Code governs export of crude oil, natural gas and petroleum products.

There is no specific authorisation for the export of petroleum products. It would be sufficient for a private investor to hold an operating concession to be entitled to export hydrocarbons extracted from this concession pursuant to Article 49.2 of the Hydrocarbons Code.

Product export is subject to the following obligations: (i) payment of a proportional fee in case it is perceived in kind; (ii) contribution to the supply of the local market.

Cross-border pipelines are subject to the authorisation of the MI and payment of related fees.

The transfer of interests in refinery are subject to the prior approval of the MI. There are no specific provisions on this matter regarding distributor and buyers.

International and local investors are treated on an equal footing.

The incentives applicable for upstream operations are as follows.

Private investors are entitled to repatriate the hydrocarbons export proceeds in compliance with exchange law and can freely transfer dividends abroad.

Any foreign investor has also the freedom to repatriate profits and actual net proceeds from sale of capital invested in foreign currency, even if the amount is greater than the initial investment. They can also freely carry out transfers related to research, prospection and exploitation activity in compliance with the exchange regime annexed to the special agreement.

Foreign private investors benefit also from advantages related to the import (without the completion of foreign trade formalities) of equipment and vehicles necessary for the activity.

In case of dispute a foreign investor can resort to international arbitration.

There are no specific incentives provided for downstream operations.

Refinery: STIR is the only company carrying out refinery activities.

Distribution: there is only a distributors list, approved and updated.

Principal Environmental Laws

  • United Nations Conventions on the Law of the Sea, dated 1982;
  • Hydrocarbons Code – governs duties of private investors on environmental matters on upstream operations;
  • Forestry Code – governs liquid and pipelines installations crossing national parks and natural reserve;
  • Water Code – governs inter alia the discharge or the disposal in the sea of materials;
  • Law No 96-41, dated 10 June 1996, on waste and the control of its management and disposal – governs inter alia management waste and disposal of hazardous materials;
  • Law No 2007-34, dated 4 June 2007, on air quality – governs measures to be undertaken to prevent limit and reduce air pollution;
  • Decree 2005-1991, dated 11 July 2005 on environment impact assessment and setting categories submitted to on environment impact assessment and those submitted to book of specifications – governs the content of the environment impact assessment and related procedures and also lists categories submitted to environment impact assessment and those submitted to book of specifications;
  • Decree No 85-56, dated 2 January 1985, on governing discharges in the receiving environment – governs oil spill in the receiving environment.

Major Regulators

  • The Ministry of Environment and Sustainable Development can notably:
    1. promote legislation on environmental protection and nature conservation and work towards the integration of the concept of sustainable development into national strategies and plans, by taking measures of a general or specific nature in the various fields relating to the environment and development and by setting up standards for the protection of the environment;
    2. work towards the establishment of rules of good environmental governance in all sectors of activity and in the field of natural resources, and take all necessary measures, in co-operation with all parties concerned, to prevent and avoid risks and to address possible or foreseeable environmental problems, without waiting for them to occur.
  • The National Agency for the Environment Protection (Agence Nationale de Protection de l’Environement, NAEP) – http://www.anpe.nat.tn – has mainly powers to:
    1. participate in the development of the government's general policy on pollution control and environmental protection and implement it through specific and sectoral actions as well as global actions within the framework of the national development plan;
    2. approve environmental impact assessment or not;
    3. ensure the control and monitoring of polluting discharges and treatment facilities of such discharges;
    4. examine investment approval files for all projects aiming at contributing to pollution control and environmental protection.
  • The National Agency for Waste Management (Agence Nationale de Gestion des Déchets) – http://www.anged.nat.tn/ – may notably:
    1. participate in the development of national waste management programmes;
    2. participate in the drafting of regulatory texts relating to waste management;
    3. assist industrialists in the field of waste management.

A private investor must:

  • prepare an environmental impact study to be approved prior to each phase of its research and development works;
  • take all necessary measures to protect the environment and to meet commitments made within the impact study as approved by competent authority;
  • contract public liability insurance against risks of damages to others property and to third parties due to its activity, including inter alia risks of environments damages;
  • carry out a study of the security measures to be taken to protect personnel, installations, population and the environment, in particular against explosions and fires, in accordance with the relevant Tunisian legislation and, failing that, with the practices of the oil and gas industry.

A private investor must submit the environmental impact study to the approval of the NAEP in three original copies. The environment impact study must include information provided in the regulations.

NAEP can object to the realisation of the unit within 21 days to three months as from the receipt of the environment impact study, depending on the unit classification. Beyond these deadlines NAEP approval for the realisation of the unit is deemed to have been granted.

The relevant licences for the realisation of the unit cannot be delivered in case NAEP makes an opposition on the environment impact assessment.

Generally, the requirements under Tunisian law apply to onshore exploration and production operations as well as to offshore activities.

Any request for waiver of an operating concession must be drafted according to the template provided within the Hydrocarbons Code.

The file to be submitted to the authority should include an abandonment plan along with a decommissioning plan.

Abandonment, decommissioning and removal of petroleum facilities located in the sea or on a land-based site, and rehabilitation of sites located in marine environment, should be subject to the law into force.

An operating concession holder may constitute a provision to cover the costs of abandonment and restoration of the site. In any case, the competent authority can require from the holder to provide, for its benefit a guarantee covering the implementation of abandon or rehabilitation of the site of exploitation. This guarantee does not release the holder from the execution of its obligations related to abandon and rehabilitation.

The following climate change laws are in effect:

  • Presidential Decree No 2016-125, dated 31 October 2016, on ratification of the Paris Agreement related to climate for the implementation of the United Nations Framework Convention on Climate Change;
  • Governmental Decree No 2018-263, dated 12 March 2018, establishing a management unit by objectives for the implementation of the monitoring and co-ordination programmes related to the implementation of Paris Agreement related to climate for the implementation of the United Nations Framework Convention on Climate Change and setting its missions, organisation and operating mode.

We do not have, for now, specific provisions relating to the oil and gas industry.

Article 6 of governmental Decree No 2018-263, dated 12 March 2018, provides the possibility to establish two technical advisory committees, one of which is in the field of greenhouse gas mitigation.

Regarding carbon taxes, the Agence Nationale pour la Matrise de l’Energie and the United Nations Development Programme are launching a new project entitled 'Support for carbon pricing for the implementation of the Designated National Contribution (DNC)'.

Oil and gas activities are exclusively regulated by MI and parliament. Local government has no regulatory powers over the industry.

We do not have any special laws or regulations or special upstream licences relating to upstream development of unconventional upstream interests.

There are no special schemes relating to liquefied natural gas (LNG) projects.

Confronted with a growing energy deficit, Tunisia is looking at different ways to improve its energy supply while conforming to international standards on climate change. As domestic production eases, further amendments to the legislation surrounding the hydrocarbons sector to make it more attractive to investors is likely. Tunisia is also looking to reduce its carbon footprint by 41% by 2020 and to increase energy efficiency by 3% per year between 2013 and 2020. Coupled with the target of producing 30% of its energy through renewables by 2030, the country is committed to diversifying its energy sources and reducing its supply gap.

The Tunisian energy authorities are currently working on amending the Hydrocarbon Code, so that it adapts to the national and international energy context and is more attractive to investors. As Tunisia has a significant potential for non-conventional energy, the new code includes specific provisions for non-conventional energy resources, including shale gas, in anticipation of possible exploration of these energies.

No material changes in oil and gas law or regulations have occurred over the past year.

Ferchiou & Associés (FA)

34, Place du 14 janvier 2011,
1001 Tunis,
Tunisia.

+216 71 120 500

+216 71 350 028

contact@falaw.tn http://www.ferchioulaw.com/index.php
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Law and Practice in Tunisia

Authors



Ferchiou & Associés has its head office in Tunis, comprised of 75 total staff including lawyers, tax advisors and legal support. The firm’s expertise in the oil and gas sector includes: hydrocarbon titles transfer and acquisitions; upstream and downstream legal advice on oil project financing; environmental due diligence; regulatory compliance and policy; counsel to the Tunisian government, major state-owned companies, and multinationals. The firm also holds expertise in M&A, financing, contract review, labour and employment and tax. FA's relevant recent deals include: providing legal advice to Panoro SA in relation to its acquisition of DNO Tunisia SA and Petrofac in relation its acquisition of Perenco; acting as legal advisor to OMV in the context of its activities in Tunisia; and acting as legal advisor to Carlyle International Energy Partners relative to the transfer of the interests held by Medex Pétroleum.