Granting of Rights

 

The granting of petroleum exploration and exploitation rights can be obtained through:

 

 

- Preliminary Evaluation License

 

The main purpose of this license is to allow the acquisition and processing of information for a better assessment of the area in question.

 

Any entity endowed with proven technical, economic and financial capability for this purpose may request the attribution of a license for prior assessment of the petroleum potential of an area or areas destined to the exercise of petroleum exploration and exploitation activities.

 

The preliminary evaluation license will have an area consisting of a maximum of 35 lots, with at least one common side, and will have a maximum duration of 6 months, and cannot be extended.

 

- Concession contract

 

In compliance with current legislation, and in compliance with Directive 94/22/EC, of ​​May 30, the right to access and exercise petroleum exploration and exploitation activities is subject to a single title - Concession Contract , covering all 3 phases of activity: exploration and development and production (exploitation).

 

Concession Area:

 

The onshore and offshore Meso-Cenozoic sedimentary basins are divided, for purposes of defining concession areas, into quadrants of 1º latitude by 1º longitude, which, in turn, are subdivided into lots. The 5' latitude by 6' longitude lot (except when intersected by the coastline, 200 m deep polygonal or Exclusive Economic Zone boundary line) is the basic unit of the concession area and has an average area of ​​about of 80 km². Geographic Information (Petroleum– Areas allocated for the exercise of the activities) to identify the Quadrants/Lots.

 

Source GPEP: Naming Lots/Quadrants

 

One or more contiguous lots with a common side, in the concession area, constitutes a Concession Block.

 

The Concession Area may consist of one or more blocks, but as a whole it cannot exceed 16 lots; that is, a maximum limit of around 1300 km² per contract. This limit of 16 lots per area can be exceeded in deep-offshore concessions (areas whose seabed depth is greater than 200 m).

 

The establishment of a concession area may be conditioned, in certain areas, by their characteristics and/or by specific legislation.

 

 

Applications and Attribution Procedures

 

The application and attribution procedures are in accordance with the European directives for free competition, being legally foreseen the attribution through public tender or through direct negotiation, for the cases foreseen in Decree-Law nº 109/94, of 26th of April, without prejudice to Notice No. 8103/2015. See Legislation.

 

The Government, through the minister responsible for the ​​energy setor, is responsible for granting a concession for the exercise of petroleum exploration and exploitation activities.

 

The issuance of preliminary evaluation licenses is the responsibility of DGEG, with the authorization of the responsible minister.

 

The attribution of rights relating to the exercise of these activities can only be made with the safeguarding of national interests in matters of defence, the environment, navigation and research, management and preservation of sea resources, and the competent sectorial entities must therefore be heard. and obtained the authorizations/licensing provided for under the terms of the specific applicable legislation. See Legislation.

 

 

Concession contract

 

Contract Terms

 

The initial period, of exploration, of the concession contract (initial term), has a normal duration of eight years. This period can be extended for one year to allow for the finalization of work plans and for another year if necessary to assess a potential commercial discovery.

 

The initial period and periods for production and demarcation of petroleum blocks may, in concessions in the deep offshore (bathymetry beyond 200 meters), exceed these fixed limits.

 

The work plan for the inicial period is proposed in the context of bidding or negotiated, with minimum work obligations consisting of: one well per year and per block, from the fourth year onwards, inclusive. For the deep offshore, the number of wells to be carried out may be less than the number of wells set for the onshore and shallow offshore (bathymetry less than or equal to 200 meters).

 

In the event that a commercial discovery is announced by the concessionaire during the initial period, the petroleum field area enters the development and production phases that have a duration of 25 years, extendable, when justified, up to a maximum of 40 years. Exploration may continue in the rest of the concession area until the initial eight-year period and its possible extensions expire.

 

Relinquishment

 

At least 50% of the concession area must be relinqueshed at the end of the fifth year and a further 50% of the remaining area at the beginning of the first extension period, ie at the end of the eighth year. When calculating the areas to be restored, the areas demarcated for development and production purposes will not be considered.

 

Concessionaires are free to choose which areas to return, as long as the remaining area is made up of adjacent lots, whole or fractions of 1' of latitude by 1' of longitude.

 

In concessions in the deep offshore, the areas to be returned may be less than the fixed amount and the deadline for their return may exceed the defined limit.

 

Contracts Termination

 

In addition to the normal legal situations under which concession contracts expire or are terminated, extinction by unilateral decision of the concessionaire is allowed:

 

At the end of the 3rd year;

At the end of each of the following years;

At any time during the production period;

provided that all contractual obligations are fulfilled in the meantime.

 

Granting Rights summary

 

Name	Maximum Area	Duration	Allowed activities	Minimum obligations
Preliminary Evaluation License	35 lots  ca. 2800 km²	6 months	Existing data evaluation and geophysical surveys	Evaluation reports
Concession contract	16 lots* ca. 1300 km²	Exploration period: 8 years* (+ 2 possible extensions 1 year each)	Geological, geophysical and geochemical surveys; exploration wells	years 1 to 3: negotiable
				yeas 4 to 8: 1 well/year**
		Production period: 25 year* (up to 40 years)	Appraisal and production wells	None

 

* The number of lots and the duration of these periods may be higher in deep offshore concessions.

 

** The number of wells to be carried out may be lower in deep offshore concessions.