Production Sharing Agreement Norway
The Mineral Oils Act requires licensees to submit to the ministry a closure plan between two and five years before the expiry or waiver of the production licence, or the use of an oil facility is permanently abandoned. A decommissioning plan has two components: an impact analysis and facility disposal plans. Applications are reviewed on the basis of publicly available criteria and the production licence is granted primarily on the basis of the applicant`s technical qualifications, relevant experience, financial capacity, geological understanding, exploration program proposals and proposed participation and operator. Previous experience with the applicant may also be taken into account in the assessment. In addition, there is a long-standing policy of granting production licences only to competent oil companies. It is therefore unlikely that purely financial investors will qualify directly. The model unit agreement was developed in collaboration with Norsk Olje og Gass and approved in 2012 by the Ministry of Petroleum and Energy. The agreement is based on the joint enterprise agreement of the model and reflects the recent changes to this agreement with regard to dispute settlement: model unit agreement The improvement in the valuation rate in production fields can further increase the value added on the Norwegian department. The decline in production from a field also frees up infrastructure capabilities which, by blocking it with new resources, to the same… Production licences are generally granted through licensing cycles during which the ministry announces that companies can apply for production licences in certain geographic areas (blocks). The procedures for announcing the persons that may apply, the content of the applications and the application procedures are governed by Chapter 3 of the Oil Act and Chapter 3 of the Oil Regulation. The Norwegian Petroleum Directorate has also developed detailed guidelines for applications.
This information is available on the Directorate`s website. If all licensees agree, they can waive the production license once they have completed the mandatory work. Abandoned land may be allocated to new groups of licensees at a later date. This will ensure a steady improvement in the mapping of oil resources in different parts of the Norwegian continental shelf. As a result, we now have in-depth knowledge of underwater resources in many areas. It is customary for applicants to enter into group application agreements in licensing cycles. These agreements must not provide for conditions that could affect the allocation or regulation of the joint venture, which must be created by the takers, without its own legal personality, and are subject to the Ministry of Oil and Energy. After the grant, a production licence is valid for an initial period of up to ten years, which is reserved for exploration activities. In order to ensure that the area for which the production licence applies is properly reviewed, the group of licensees is required, in accordance with the terms of the licence, to implement a work programme. The work obligation of the production licence may include geological and/or geophysical activities and exploration drilling. The license contains deadlines for the completion of the various activities.