PETROLEUM (EXPLORATION AND PRODUCTION) ACT: SUBSIDIARY LEGISLATION(CHAPTER 440 )

CHAPTER 440 - PETROLEUM (EXPLORATION AND PRODUCTION) ACT: SUBSIDIARY LEGISLATION

INDEX TO SUBSIDIARY LEGISLATION

Petroleum (Exploration and Production) (National Petroleum Company) Regulations, 2011

Petroleum (Exploration and Production) Regulations

Petroleum (General) Regulations

PETROLEUM (EXPLORATION AND PRODUCTION) (NATIONAL PETROLEUM COMPANY) REGULATIONS, 2011

[Section 100]

Arrangement of Regulations

Regulation

1. Title

2. Interpretation

3. Objects of Company

4. Shareholding of Company

5. Composition of Board

6. Missing

7. Prohibition of publication of, or disclosure of information to unauthorised person

Act 10 of 2008,

SI 57 of 2011.

1. Title

These Regulations may be cited as the Petroleum (Exploration and Production) (National Petroleum Company) Regulations, 2011.

2. Interpretation

In these Regulations, unless the context otherwise requires–

“Board” means the Board of Directors of the National Petroleum Company;

“Company” means the National Petroleum Company;

“licence” means a petroleum exploration licence or a petroleum development and production licence; and

“member” means a shareholder in the Company, other than the Government.

3. Objects of Company

The Company shall hold shares on behalf of the Government in petroleum operations and shall–

(a) carry, explore, produce, refine, process, transport and trade in–

(i) petroleum from wells;

(ii) petroleum products;

(iii) natural gas; and

(iv) other fluid hydro-carbons;

(b) carry out directly or through its subsidiaries, with or without the association of third parties, any of the activities listed in these objectives outside Zambia;

(c) form consortia with local and foreign enterprises, either as leader or not, so as to expand its activities, gather technology and expand investments applied to the petroleum industry;

(d) establish subsidiaries, which may enter into joint ventures with other enterprises either with majority or minority shareholding;

(e) establish a subsidiary, which may operate in association with other enterprises with majority or minority shareholding, for the purpose of building and operating–

(i) the Company’s pipelines; and

(ii) the Company’s fleet for the transportation of petroleum, national gas and other by-products;

(f) acquire goods, works and services in accordance with the Public Procurement Act, 2008; and

(g) perform such other functions as may be required for the better carrying out of these Regulations.

4. Shareholding of Company

(1) The Government shall hold 51 per cent of the shares in the Company and 49 per cent of the shares of the Company shall be available to Zambian citizens through the floatation of shares on the Zambian Stock Exchange.

(2) The Government may transfer its shares upon a change of policy.

5. Composition of Board

(1) The Board shall consist of the following Directors:

(a) a person with expertise in–

(i) engineering;

(ii) law;

(iii) finance;

(iv) upstream petroleum sector; and

(v) petroleum economics;

(b) a representative of the Ministry responsible for finance;

(d) a representative of the Ministry responsible for mining; and

(e) a representative of the Attorney-General.

(2) A person shall not be eligible for appointment as Director of the Board if that person–

(a) is not a citizen of Zambia;

(b) is an undischarged bankrupt;

(d) has been convicted of an offence under the Act or any other written law and sentenced to a term of imprisonment exceeding six months without the option of a fine;

(e) has been convicted of an offence involving fraud or dishonesty;

(f) holds a licence;

(g) has an interest in a partnership or corporation that is that holders of a licence.

7. Prohibition of publication of, or disclosure of information to unauthorised person

(1) A person shall not, without the consent in writing given by, or on behalf of, the Board, the Board, publish or disclosure to any unauthorised person, otherwise than in the course of that persons duties, the contents of any document, communication or information whatsoever, which relates to, or which has come to that person’s knowledge in the course of that person’s duties under this Act.

(2) A person who contravenes sub-regulations (1) commits an offence and is liable, upon conviction, to a fine not exceeding 2,00,000 penalty units or to imprisonment for a period not exceeding two years, or to both.

(3) A person who, having information which to the knowledge of that person has been published or disclosed in contravention of sub-regulation (1), unlawfully publishes or communicates the information to any other person, commits an offence and is liable, upon conviction, to a fine not exceeding 2,00,000 penalty units or to imprisonment for a period not exceeding two years, or to both.

PETROLEUM (EXPLORATION AND PRODUCTION) REGULATIONS

[Section 50]

[RETAINED UNDER SECTION 15 OF THE INTERPRETATION AND GENERAL PROVISIONS ACT]

Arrangement of Regulations

PART I
PRELIMINARY

Regulation

1. Title

2. Interpretation

PART II
BLOCKS

3. Graticulation and constitution of blocks

4. Closed areas

PART III
BIDS

5. Information to be submitted by bidders

6. Bid proposals

7. Criteria for selection of bidders

8. Rejection of bids

PART IV
PETROLEUM OPERATIONS

9. Exploration period

10. Extensions to exploration period

11. Development and production operations

12. Mandatory and voluntary relinquishment

13. Transfers and assignments

PART V
WORK PRACTICES

14. Work practices and directions

15. Drilling practices and abandonment

16. Construction of pipelines and related facilities

17. Measurement

PART VI
RETURNS, RECORDS, PLANS, ETC.

18. Notice of commencement

19. Quarterly reports

20. Annual work programme

21. Annual report

22. Periodic reports

23. Records, accounts, etc., to be maintained

24. Final reports

25. Modification of duties

26. Confidentiality

27. Power of entry and inspection

PART VII
FINANCIAL PROVISIONS

28. Fees and rentals

29. Royalty or production payment

SCHEDULE

SI 88 of 1985,

SI 165 of 1989,

SI 75 of 1990.

PART I
PRELIMINARY

1. Title

These Regulations may be cited as the Petroleum (Exploration and Production) Regulations.

2. Interpretation

In these Regulations unless the context otherwise requires—

"development and production operations" means operations for or in connection with the production of petroleum;

"drilling" means operations for or in connection with the perforation of the earth's surface, whether the hole is vertical, inclined or horizontal; and includes all operations for preventing the collapse of the sides of the hole or for preventing the hole from becoming filled by extraneous materials (including water) and the fitting of wellheads, or coring or logging, and any operations incidental thereto;

"exploration operations" means operations for or in connection with exploration for petroleum;

"field" means an area, as determined pursuant to the terms of a contract, in which a commercial discovery of petroleum has been made;

"graticular section" means a graticular section referred to in regulation 3;

"well" means any opening in the ground made or being made by drilling or boring, or in any other manner, in connection with exploration operations or development and production operations, other than a seismic hole.

PART II
BLOCKS

3. Graticulation and constitution of blocks

(1) For the purpose of establishing the blocks referred to in section 23 of the Act, the surface area of the Republic shall be deemed to be divided into graticular sections by reference to meridians of longitude which are five minutes apart measured from the meridian of Greenwich and by reference to parallels of latitude which are five minutes apart measured from the Equator.

(2) Each graticular section shall be bounded by part of two meridians of longitude which are five minutes apart and by part of two parallels of latitude which are five minutes apart.

(3) Where a portion of a graticular section includes land in the Republic and land outside the Republic, only that portion of the land in the Republic shall constitute a graticular section for purposes of these regulations.

(4) Each block awarded to a contractor shall be defined by reference to graticular sections.

4. Closed areas

For the purposes of section 35 of the Act, the areas declared closed to some or all petroleum operations shall be defined by reference to blocks comprised of graticular sections.

PART III
BIDS

5. Information to be submitted by bidders

(1) Every bidder when responding to an invitation for bid shall submit, inter alia, the following information—

(a) the name, address and nationality of the bidder;

(b) in the case of a corporate bidder—

(i) the bidder's place of registration or incorporation, its principal place of business, its board of directors and senior management, the domicile and nationality of the members of the board of directors and its capital structure;

(ii) the form of organisation of the bidder, including information concerning the bidder's relationship with its parent company, if any, and other affiliated companies; and

(iii) the financial structure of the bidder and its parent company, if any, including annual reports, audited balance sheets and profit and loss statements for the past three years, and any reports which the bidder or its parent company may have filled with government agencies responsible for securities regulation during that period;

(c) how exploration and development activities would be financed if the bid is successful and how performance would be guaranteed; and

(d) the bidder's previous experience in petroleum exploration, development, production, refining and marketing.

(2) Where a bid is submitted by a group of two or more persons, the information referred to in sub-regulation (1) shall be submitted for each person in the group.

(3) Where, following the submission of the information referred to in sub-regulation (1), but prior to the selection of the successful bidder, there has been any change in the information so submitted, the bidder shall forthwith inform the Minister, specifying all particulars of the change.

6. Bid proposals

(1) Each bid that is submitted in response to an invitation for bids shall include, inter alia, the following—

(a) a description of the block or blocks for which the bid is submitted; and if the bid is made in respect of more than one block, the priority assigned to each block;

(b) a detailed description of the exploration programme proposed for the block or blocks for which the bid is submitted;

(d) proposals with respect to the training of Zambian personnel and expenditures to be incurred therefor;

(e) proposals with respect to the sharing of net revenues or production between the bidder and the Government as indicated in the invitation for bids; and

(f) such other matters as may be required by the invitation for bids or which the bidder wishes the Minister to consider.

(2) Additional information on all matters referred to in the preceding sub-regulation shall be promptly supplied by the bidder, if so requested by the Minister at any time after the bid has been submitted.

7. Criteria for selection of bidders

The following shall be the criteria for the evaluation of bids and selection of bidders for negotiations—

(a) the technical competence and experience of the bidder with respect to petroleum operations;

(b) the financial resources available to the bidder to fulfil the petroleum exploration, development and production obligations under a contract;

(d) the specific contents of the bid received.

8. Rejection of bids

No rights of any kind shall be created in favour of any bidder by virtue of the submission of a bid proposal; the Minister reserves the right to accept or reject any or all of the bids without assigning any reason therefor.

PART IV
PETROLEUM OPERATIONS

9. Exploration period

(1) The exploration period shall be comprised of—

{mprestriction ids="2,3,5"}

(a) an initial period not exceeding four years in duration; and

(b) upon extension in the prescribed manner, two further periods not exceeding three years each in duration.

(2) Notwithstanding the provisions of sub-regulation (1), the exploration period may, under exceptional circumstances, be extended for a period in excess of any period specified in such sub-regulation where the terms and conditions of a contract so provide or the prior approval of the Committee has been obtained.

10. Extensions to exploration period

(1) A contractor may not later than ninety days prior to the expiration of the then current period, apply to the Minister for an extension to the initial period or to the first or subsequent extension periods, referred to in regulation 9.

(2) An application for an extension shall be made in writing to the Minister and shall be accompanied by—

(a) particulars of the work carried out and the amount expended in the contract area during the initial period, or, where the application is for a second or subsequent extension to the initial period, during the preceding period of extension, up to and including the date of application;

(b) proposals concerning the work to be carried out and the amount to be expended during the period of extension for which application is made;

(3) No extension shall be granted to a contractor unless—

(a) the contractor has fulfilled his obligations under the contract for the then current period; and

(b) the proposals accompanying the application pursuant to sub-regulation (2) (b) in respect of work and expenditure for the period of extension are consistent with his commitments therefor under the contract.

11. Development and production operations

(1) In the event that a discovery of petroleum is made in a contract area, which the contractor considers to be commercial, the contractor shall, prior to the commencement of development and production operations, submit to the Minister the following—

(a) a description and map of the area containing such discovery which the contractor proposes to delineate as a field defined by reference to graticular sections;

(b) a detailed report accompanied by supporting data and all analyses and interpretations thereof, which demonstrates that the area described in paragraph (a) contains, alone or in conjunction with other areas, as the case may be, a commercial discovery;

(d) detailed proposals for the construction, establishment and operation of all facilities and services for and incidental to the development, extraction, production, storage, transportation, sale and other disposal of petroleum; and a proposed timetable for the commencement of petroleum production;

(e) a detailed forecast of capital investment requirements, operating costs and sales revenues and the anticipated type and source of financing; and

(f) such other matters as may be required under the contract or as the Minister may reasonably require.

(2) No development and production operations may be commenced by a contractor unless—

(a) the proposals of the contractor referred to in sub-regulation (1) ensure the most efficient, beneficial and timely use of the petroleum resources concerned consistent with accepted practices in the international petroleum industry;

(b) the contractor has adequate financial resources, technical and industrial competence and experience to carry out effective development and production operations; and

(c) the contractor has fulfilled his obligations under the contract and is willing and able to comply with the terms and conditions of the contract thereafter.

12. Mandatory and voluntary relinquishment

(1) A contractor shall, at such times and in such manner as may be provided in the contract, relinquish such part or parts of the contract area as provided therein and shall notify the Minister in writing not less than ninety days prior to the effective date of any such relinquishment of—

(a) the description of the part or parts of the contract area to be relinquished; and

(b) the description of the contract area remaining.

(2) A contractor may, at such times and in such manner as may be provided in the contract, relinquish all or any part of the contract area by giving to the Minister not less than ninety day's notice in writing of his intention to so relinquish and such notice shall, in the case of a relinquishment of part or parts of the contract area, include—

(a) a description of the part or parts to be relinquished; and

(b) a description of the contract area remaining.

(3) The description of any area relinquished, or of the contract area remaining following such relinquishment, as referred to in sub-regulations (1) and (2), shall be made by reference to graticular sections.

(4) Any notice of relinquishment given pursuant to sub-regulations (1) or (2) shall be accompanied by—

(a) full particulars of the petroleum operations carried out in the area to be relinquished;

(b) an undertaking by the contractor that, prior to the effective date of such relinquishment, he shall carry out all clean-up operations and render the area safe and in a condition which is in accordance with accepted practices in the international petroleum industry; and

(5) Where the entire contract area is relinquished pursuant to this regulation, the contract relating thereto shall terminate.

(6) The relinquishment of all or any part of the contract area made pursuant to sub-regulation (1) or (2) shall be without prejudice to any liabilities or obligations incurred by the contractor in relation to the area so relinquished prior to the effective date of relinquishment.

13. Transfers and assignments

(1) An application for approval to assign, encumber or transfer any contract, or any rights or obligations arising out of a contract, shall be made in writing to the Minister; and every such application shall include—

(a) the name and nationality of the proposed assignee or transferee, and, in the case of a corporate assignee or transferee, the place of its incorporation and principal place of business;

(b) evidence of the proposed assignee's or transferee's technical and financial ability to assume and undertake the work obligations and other commitments set forth in the contract concerned;

(c) an unconditional written undertaking by the assignee or transferee to assume all the obligations assigned and transferred by the transferor or assignor under the contract; and

(d) such other particulars as the Minister may reasonably require.

(2) In addition to any information required under sub-regulation (1), the contractor may be requested, before the application is disposed of, to submit further relevant information within a specified reasonable time; and where such further information is not supplied within the time specified, the application shall be deemed to have been withdrawn.

(3) The assignment, encumbrance or transfer of any contract or interest therein shall not affect any liability of the transferor or assignor incurred before the date upon which such assignment, encumbrance or transfer takes effect; nor, unless a contract otherwise provided, shall it relieve the transferor or assignor from liability for the performance by the transferee or assignee of the obligations undertaken by the transferor or assignor at the time the contract was entered into.

PART V
WORK PRACTICES

14. Work practices and directions

(1) Every contractor shall, in carrying out petroleum operations, always act in accordance with generally accepted practices in the international petroleum industry.

(2) Where the Minister considers that a contractor has not acted in accordance with such practices and in particular, with the conservation and work practices as provided for in section 32 of the Act, he may notify such contractor in writing accordingly and require him to show cause, within such reasonable time as the Minister shall specify, why he has failed to act in accordance with such practices.

(3) Where, within the time specified in any notice issued under sub-regulation (2), the contractor fails to satisfy the Minister that he has acted in accordance with such practices or that his failure to so act is justified, the Minister may direct the contractor to take such steps as may be necessary to ensure compliance therewith.

(4) Any contractor who fails to comply with a direction given under sub-regulation (3) shall be guilty of an offence and liable on conviction to a fine not exceeding twenty-five thousand penalty units.

(5) Where proceedings are instituted for an offence under sub-regulation (4), it shall be a sufficient defence if the contractor satisfies the court that he forthwith took all reasonable steps in accordance with accepted practices in the international petroleum industry to comply with such direction.

(6) Where a contractor fails to comply with a direction given to him under sub-regulation (3), the Minister may cause to be done all or any of the things required by such direction.

(7) Any cost or expenses reasonably incurred by the Minister under sub-regulation (6) shall be a debt due to the State by the contractor to whom the direction was given and shall be paid into the general revenues of the Republic.

(8) Nothing in this regulation or in any direction given thereunder shall be construed as requiring any contractor to do anything which is not, or to refrain from doing anything which is, in accordance with generally accepted practices in the international petroleum industry.

[As amended by Act 13 of 1994.]

15. Drilling practices and abandonment

(1) Every contractor shall ensure that his well design and conduct of drilling operations, including his casing, cementing, well spaced plugging operations, are in accordance with generally accepted practices in the international petroleum industry.

(2) Every well shall be identified by name, number and geographic co-ordinates which shall be shown on maps, plans and similar records which a contractor is required to keep; and the Minister shall at once be notified in writing of any change of the name or identification number of a well.

(3) Before commencing any work on or drilling any well, or recommencing work on any well on which work has been discontinued for more than six months, a contractor shall give the Minister seven day's notice in writing and shall include in such notice—

(a) the official name and number of the well;

(b) a description of its precise location by reference to geographical co-ordinates;

(d) a detailed report on the drilling technique to be employed, an estimate of the time to be taken and depth objective, the material to be used, and the safety measures to be employed, in the drilling of the well; and

(e) a summary of the geological and geophysical data, and any interpretations thereof, upon which the contractor made his decision to drill the well in the particular location.

(4) Where any work or drilling relating to any well is discontinued for a period exceeding thirty days, a contractor shall notify the Minister in writing to that effect.

(5) Before recommencing any work on or drilling with respect to any well on which work has been discontinued for more than thirty days but for less than six months, a contractor shall give forty-eight hour's notice in writing of his intention so to do.

(6) Except with the approval of the Minister, no contractor shall drill a well from any surface area within the contract area which is less than one thousand metres from a boundary of such contract area.

(7) No well shall be drilled from within a contract area through any vertical boundary of such contract area.

(8) A directional well drilled under a contract area from a surface location on nearby land not within such contract area shall be deemed to have the same effect for all purposes of the Act as a well drilled from a surface location within such contract area and, in such circumstances, the production of petroleum from the contract area through a directional well surfaced on nearby land, or drilling or reworking of any such directional well, shall be considered production, drilling or reworking operations, as the case may be, in the contract area.

(9) Nothing contained in sub-regulation (8) shall be construed to grant to a contractor any leasehold interest, licence, easement, right-of-way or other right which such contractor is required to acquire under the Act or any other written law.

(10) Before abandoning any well, the contractor shall give, in the case of a producing well, not less than thirty days, and, in the case of any other well, not less than twenty-four hour's written notice to the Minister of his intention to abandon and such notice shall be accompanied by a satisfactory programme for the abandonment and plugging of the well identified in the notice.

(11) Subject to the terms and conditions of a contract, a contractor may, upon the expiration of the relevant period of notice or upon receipt by the contractor of the written approval of the Minister of the programme submitted pursuant to the preceding sub-regulation, whichever is earlier, commence the abandonment operations in relation to such well:

Provided that in all cases—

(i) the contractor shall undertake to securely plug such well to prevent pollution and possible damage to the deposit, and shall, except as the Minister may otherwise direct or his contract may otherwise provide, remove all equipment, materials and facilities relating thereto;

(ii) cemented strings or other forms of casing shall not be withdrawn without the prior written approval of the Minister; and

(iii) the contractor shall permit a representative of the Government to observe such operations.

16. Construction of pipelines and related facilities

(1) Each contractor shall, prior to commencing the construction, alteration or operation of a pipeline, pumping station, storage facility or any other related facilities for the conveyance or storage of petroleum from a contract area, apply in writing to the Minister for authorisation.

(2) The written application submitted pursuant to sub-regulation (1) shall be accompanied by particulars of—

(a) the proposed design and construction of the pipeline, pumping station, storage facility or other related facilities;

(b) the proposed work programme and budget and the technical and financial resources available to the contractor for the construction, alteration or operation of the pipeline, pumping station, storage facility or any other related facilities; and

(c) the proposed route to be followed by the pipeline and the location of any pumping station, storage facility or other related facilities to be constructed, altered or operated.

(3) Subject to any conditions which may have been agreed in a contract and the provisions of sub-regulation (4), and upon receipt of the Minister's written approval, a contractor may commence the construction, alteration or operation of the pipeline, pumping station, storage facility or related facilities.

(4) Nothing contained in this regulation is intended, or shall be construed, to grant any leasehold interest, licence, easement, right-of-way or other right which the contractor is required to acquire lawfully under the Act or any other written law.

17. Measurement

(1) Each contractor shall supply, operate and maintain equipment for measuring the volume and quality of any petroleum produced and saved pursuant to his contract, including gravity, density, temperature and pressure measuring devices and any other devices that may be required; and all such equipment and devices shall, prior to their installation or usage be approved by the Minister and following such installation or usage shall not be replaced or altered without the prior approval of the Minister.

(2) Measurement equipment and devices shall be available for inspection and testing at all reasonable times by any person authorised by the Minister:

Provided that any such inspection or testing shall not interfere with the normal operation of the facilities involved.

(3) Each contractor shall measure the volume and quality of the petroleum produced and saved pursuant to his contract, consistent with generally accepted practices in the international petroleum industry, with the frequency and according to procedures which shall be approved by the Minister.

(4) Each contractor shall give to the Minister timely notice of his intention to conduct measuring operations and the Minister shall have the right to be present at and supervise, either directly or through authorised persons, such operations.

(5) If it is determined, following an inspection or test carried out by an authorised person, that the equipment, devices or procedures used for measurement are inaccurate and exceed the permissible tolerances, which shall be established by agreement prior to the installation and usage of such equipment, devices or procedures, and such determination is verified by an independent surveyor acceptable to the Minister and the contractor, such inaccuracy shall be deemed to have existed for one-half of the period since the last such inspection or test, unless it is proved that the inaccuracy has been in existence for a longer or shorter period; and appropriate adjustments covering such period shall be made within thirty days from the date of such determination.

PART VI
RETURNS, RECORDS, PLANS, ETC.

18. Notice of commencement

(1) Every contractor shall, prior to the commencement of petroleum operations, or recommencement of petroleum operations which have been discontinued for a period exceeding ninety days, give the Minister not less than forty-eight hour's notice in writing of his intention to commence or recommence such operations.

(2) Any notice given pursuant to sub-regulation (1) shall include the name and address of the local resident manager under whose supervision such operations are to be carried out.

19. Quarterly reports

(1) Every contractor shall submit to the Minister, on or before the 30th day of January, April, July and October, a report in respect of the preceding quarter containing or showing—

(a) a description of the results of all petroleum operations carried out by the contractor;

(b) in the case of exploration operations, a summary of all geological and geophysical work carried out by the contractor, including a summary of all drilling activities;

(c) a list of maps, reports and other geological and geophysical data prepared by, or on behalf of, the contractor in respect of the period concerned;

(d) in the case of development and production operations, the gross volume and quality of all petroleum produced, saved, sold or otherwise disposed of from his contract area, the consideration accrued or received the quantity disposed of and identity of the person; to whom such quantity was disposed, and the balance of stocks on hand at the end of the period concerned;

(e) the average number of persons employed in the Republic, in terms of Zambian and expatriate personnel, in connection with the petroleum operations carried out;

(f) the amounts disbursed in the Republic in respect of wages, overtime, allowances or other emoluments or benefits;

(g) the amounts disbursed in the Republic and externally, for the purchase of fuels, stores, foodstuffs or other materials, equipment or services;

(h) the total operating and capital expenditures incurred, both in the Republic and externally, in respect of the petroleum operations carried out, determined in accordance with his contract;

(i) any other relevant information which may be required by his contract or which the Minister may reasonably require.

(2) With respect to paragraphs (f), (g) and (h) of sub-regulation (1), when the precise amount is not ascertainable by the date upon which the report is due, figures which are the best possible approximation shall be given.

20. Annual work programme

Every contractor shall submit to the Minister, on or before the 30th day of September of each year, a complete programme of work to be carried out during the following year, together with a detailed budget of the expenditures to be incurred.

21. Annual Report

On or before the 31st day of March of each year every contractor shall submit to the Minister an annual report in respect of the preceding year containing—

(a) the information required by sub-regulation (1) (a) to (i) of regulation 19 for the entire year;

(b) estimates (if available) of economically recoverable reserves of crude oil and natural gas at the end of the year concerned;

(i) the boundaries of the contract area;

(ii) the total surface area of the contract area in square kilometres;

(iii) the location of any wells drilled by the contractor during that year; and

(iv) the location or routing of any buildings, roads, powerlines, pipelines and similar permanent installations.

22. Periodic reports

(1) During the conduct of drilling operations, every contractor shall be required to submit daily drilling reports to the Minister describing the progress and results of such operations.

(2) Every contractor shall within one hundred and eight days of the completion of any survey, test or drilling operations, or, in the case of data that cannot reasonably be obtained or compiled in that period, as soon as possible thereafter, submit to the Minister the following data including any interpretations thereof—

(a) geological data including—

(i) surface or photogeological and subsurface maps of the area explored;

(ii) stratigraphic data, including measured stratigraphic surface sections, lithological groups, information relating to the porosity and the permeability of petroleum bearing zones;

(iii) lithologic and/or paleontologic samples; and

(iv) summary reports of the geological data including references to the survey and processing techniques utilised;

(b) geophysical data including—

(i) seismic data, including—

A. short-point and elevation maps;

B. interpretive contour maps on critical or outstanding mapping horizons;

C. seismic record sections;

D. location and elevation survey notes; and

E. summary reports of the seismic data including references to the survey and processing techniques utilised;

(ii) gravimetric data, including—

A. gravity station location and elevation maps;

B. observed gravity value contour maps and any derivative maps;

C. gravimetric survey notes; and

D. summary reports of the gravimetric data including references to the survey and processing techniques utilised;

(iii) magnetic data, including—

A. station and/or flight line base maps;

B. total intensity value maps and any derivative maps; and

C. summary reports of the magnetic data including references to the survey and processing techniques utilised;

(i) engineering data;

(ii) geological data;

(iii) drill stem/production test results;

(iv) all wireline logs (at recommended scales of 1:1000, 1:500 and 1:200);

(v) samples and sample descriptions; and

(vi) core samples, core descriptions and laboratory analyses of the same; and

(d) such other data as the Minister may, by written notice to the contractor, reasonably require him to so submit.

23. Records, accounts, etc., to be maintained

(1) Every contractor shall in respect of his contract area keep at his registered office in the Republic accurate records containing full particulars of the following matters—

(a) the drilling, operation, deepening, plugging or abandonment of wells;

(b) the strata and subsoil through which wells are drilled;

(d) any petroleum, water and other economic minerals encountered;

(e) the areas in which any geological or geophysical work has been carried out;

(f) accurate geological maps and plans, geophysical records, representative geological samples and test results, and all interpretations thereof; and

(g) such other matters as may be provided in his contract or as the Minister may reasonably require by notice in writing to the contractor.

(2) Every contractor shall keep at his registered office in the Republic accurate accounts containing full particulars of the following—

(a) the gross quantity of any crude oil and natural gas produced and saved from the contract area;

(b) the grades and gravity of any crude oil produced and the composition of any natural gas produced;

(c) any quantities of crude oil, natural gas and sulphur, in any form, or any other minerals, gases, liquids or solids disposed of by way of sale or otherwise, the consideration received, the quantity disposed of and the name of the person to whom any such quantity was disposed;

(d) the quantity of crude oil, natural gas and other liquids or gases injected into a formation;

(e) the quantity of crude oil and natural gas consumed for drilling and other development and production operations (other than quantities reported under paragraph (d)) and consumed in pumping to field storage, refineries in the Republic or the point of export;

(f) the quantity of crude oil refined by or for the contractor in the Republic;

(g) the quantity of natural gas treated in the Republic by him or on his behalf for the removal of liquids and liquified petroleum gases and the quantity of butane, propane and any other liquids, gases or any solids obtained;

(h) the quantity of natural gas flared; and

(j) such further information as may be required by his contract or as the Minister may reasonably require.

24. Final reports

Prior to the termination of a contract, or upon the relinquishment of any part of a contract area, the contractor shall forthwith submit to the Minister, in relation to the contact area or part thereof, copies of—

(a) all records which the contractor maintained pursuant to this Part;

(b) all plans or maps of such area which were prepared by or on behalf of the contractor;

(d) such other documents or materials as the Minister may, by notice given to the contractor, reasonably require the contractor to so submit.

25. Modification of duties

The Minister may, on application made to him in writing by a contractor, by notice in writing, dispense with or modify any of the requirements of regulations 19 to 24 to the extent and on such conditions as may be stated in the notice

26. Confidentiality

(1) All returns, reports, plans, data and other information submitted under these Regulations shall be treated as confidential by the Government and shall not, unless otherwise provided in a contract, be disclosed to third persons prior to the relinquishment of the area to which they relate, or prior to the end of the exploration period if such area is not sooner relinquished:

Provided that—

(a) any topographical and surface geological maps and interpretations may be utilised at any time by the Government departments concerned for incorporation into official maps;

(b) annual statistical information may be published at any time by the Government in a form which does not disclose the operations of any particular contractor; and

(c) the Government may make such returns, reports, plans, data and other information available at any time to professional consultants, legal counsel, accountants, underwriters, lenders and such Government entities as may need to be made aware thereof.

(2) No contractor shall, unless otherwise provided in a contract, disclose any returns, reports, plans, data, records and other information compiled, received, maintained or submitted pursuant to these Regulations or the terms and conditions of a contract without the prior written approval of the Minister—

Provided that—

(a) a contractor may make such returns, reports, plans, records and other information available, without the approval of the Minister, to professional consultants, legal counsel, accountants, underwriters, lenders, companies in which a contractor maintains a controlling interest and such Government entities as may need to be made aware thereof or have the right to require such disclosure; and

(b) any disclosure made by a contractor to third parties pursuant to this sub-regulation shall only be made on terms which ensure that the information so disclosed is treated as confidential by the recipient.

27. Power of entry and inspection

(1) Any authorised person may at all times—

(a) enter any area, building, structure, vehicle, vessel or aircraft or examine or have examined by a qualified person any machinery or equipment, which has been, is being or is to be, used in connection with petroleum operations;

(b) take or remove samples of petroleum, water or other substances for the purpose of testing or analysis;

(d) make such examinations and enquiries and carry out such functions as may be necessary to ensure that the provisions of the Act or the terms and conditions of a contract are being complied with.

(2) Where there is a person present who is or appears to be in charge of the area, building, structure, vehicle, vessel, aircraft, machinery, equipment or matter or thing in respect of which any of the powers under sub-regulation (1) are to be exercised, any authorised person shall, before exercising any such power, identify himself to that person and shall, if so requested by that person, produce evidence of his authority.

(3) In exercising his power under sub-regulation (1), an authorised person shall not unduly interfere with any petroleum operations being carried out.

(4) Any person who is an occupier or person in charge of an area, building or structure, or the person in charge of any vehicle, vessel, aircraft, machinery, equipment or matter or thing referred to in sub-regulation (1), shall provide the authorised person with all reasonable facilities and assistance for the effective exercise of his functions under these Regulations.

PART VII
FINANCIAL PROVISIONS

28. Fees and rentals

(1) The fees and surface rentals set out in Part I of the Schedule shall be payable in respect of the matters specified therein.

(2) All fees and surface rentals payable under these Regulations shall be paid into the general revenues of the Republic in advance and without demand.

29. Royalty or production payment

(1) A royalty or production payment shall be payable at the rates prescribed in Part II of the Schedule in respect of the annual gross production of—

(a) crude oil produced and saved in each year from a contract area; and

(b) natural gas produced, saved and sold in each year from a contract area.

(2) The royalty or production payment due shall be payable quarterly within thirty days of the end of each quarter.

SCHEDULE

PART I
FEES AND SURFACE RENTALS

Column A
Fee unit

Column B US $

1. Fees for inspection of the Register:

-for general search and examination of the Register

-for the supply of a copy of and entry on the Register

10.00

2. Surface rentals:

-annual surface rentals for a contract area during the exploration period (per square kilometre or part thereof).

5.00

-annual surface rentals for surface area of a field (per square kilometre or part thereof)

NOTE:

In the case of foreign nationals or foreign companies (or persons or entities under effective foreign control) the fees and surface rentals set out in Column B shall be paid in United States dollars or any other currency acceptable to the Minister.

PART II
ROYALTY OR PRODUCTION PAYMENT

1. Crude Oil

at a rate of not less than ten percent (10%) of the wellhead value.

2. Natural Gas

at a rate of not less than five percent (5%) of the wellhead value.

NOTE:

"Wellhead value" for the purpose of this Part shall mean the net realised price received by a contractor at the point of export or other agreed delivery point from the sale or other disposition of crude oil or natural gas, as the case may be, less such costs as the Minister may reasonably allow in respect of handling and transportation from the wellhead to such point of export of other agreed point of delivery.

[As amended by S.I. 165 of 1989; 75 of 1990; Act 13 of 1994.]

PETROLEUM (GENERAL) REGULATIONS

[Section 3]

[RETAINED UNDER SECTION 15 OF THE INTERPRETATION AND GENERAL PROVISIONS ACT]

Arrangement of Regulations

Regulation

1. Title and application

2. Interpretation

3. Issue of licences

4. Storage sheds

5. Soldering of filled tins

6. Inspection of premises

7. Application for licences to possess dangerous petroleum

8. Expiration of licence

9. Possession of valid licence required

10. Liability for expenses incurred through breach of Regulations

11. Renewal of licences

12. Prescribed fees

13. Prescribed forms

14. Revocation of licences

15. Transport of dangerous petroleum

16. Transport of dangerous petroleum in bulk

17. Powers of police and road traffic inspectors

18. No relief from liability for damage

SCHEDULE

Act 13 of 1994,

GN 48 of 1932,

GN 108 of 1932,

GN 63 of 1939,

GN 88 of 1948,

GN 281 of 1958,

GN 156 of 1959,

GN 375 of 1961,

GN 69 of 1963,

GN 202 of 1964,

GN 481 of 1964,

GN 497 of 1964,

SI 33 of 1965,

SI 446 of 1969.

[Regulations by the Minister]

1. Title and application

These Regulations may be cited as the Petroleum (General) Regulations, and shall apply to all areas other than those to which the Townships (Petroleum) Regulations, the Livingstone Municipal By-laws or the Ndola Municipal By-laws have been applied.

[As amended by 63 of 1939.]

2. Interpretation

In these Regulations, unless the context otherwise requires—

"council" means a township council or a rural council;

"dangerous petroleum" means the following brands of petroleum—

Atlantic, Atlas, Benzol, B.P., Natalite, Pegasus, Pratts, R.O.P., Shell, Texaco;

and any other brand of petroleum which may be declared by the Minister, by statutory notice, to be dangerous petroleum;

"licensing officer" means any person authorised in that behalf by resolution of a council to issue licences under these Regulations;

"petroleum in bulk" means petroleum in quantities exceeding two thousand five hundred litres contained in any one receptacle;

"premises" means any land or any building together with the land on which the same is situated and any adjoining land used in connection therewith for the storage of dangerous petroleum in excess of two hundred litres otherwise than in bulk;

"protected works" include buildings in which persons dwell or assemble, docks, wharves, timber yards, public roads and any other place not forming part of an installation which the Minister may by notification declare as protected works, it being understood that the timekeeper's or administrative office of an installation does not come under the classification of "protected works";

"storage shed" means a building used for the storage of dangerous petroleum in excess of two hundred litres otherwise than in bulk.

[As amended by 108 of 1932; 88 of 1948; 202 of 1964 and 446 of 1969.]

3. Issue of licences

Licences for keeping dangerous petroleum exceeding two hundred litres may be issued by a council, and shall ordinarily be granted only when the premises intended to be used for the storage of such petroleum fulfil the conditions of regulation 4:

Provided that a council, with the approval of the Minister, may, for special reasons to be recorded in writing before granting such licence, dispense with any or all of the said conditions, and such licence shall be endorsed accordingly.

[As amended by 88 of 1948; 202 and 481 of 1964 and 446 of 1969.]

4. Storage sheds

(1) The following conditions shall apply to the construction, maintenance and operation of storage sheds—

(a) licences may be granted for any quantity of dangerous petroleum to be stored in any one building, if the plot on which the storage shed is erected is so situated or is large enough to ensure a clear space of one thousand five hundred and twenty four metres in width around the shed or sheds. A clear space of at least ninety-one metres in width must be left between storage sheds on the same plot;

(b) the storage shed shall be constructed either—

(i) entirely of non-inflammable material; or

(ii) of inflammable material specially approved by a council;

(d) every person managing or employed on or in connection with a storage shed shall abstain from any act whatsoever which tends to cause fire and which is not reasonably necessary, and shall prevent any other person from doing such act;

(e) no smoking shall be permitted in a storage shed or adjacent thereto, and suitable notices to this effect shall be conspicuously posted on the plot;

(f) no fire or naked lights shall be permitted in or adjacent to a storage shed;

(g) supplies of sand or dry earth (not less than three thousand nine hundred and two kilogrammes) shall be kept available for use in case of fire, and, in addition, at least one extinguisher of a type approved by the authorised officer in the Ministry of Energy;

(h) no vessel containing dangerous petroleum shall be opened and no petroleum shall be drawn from any vessel within the building in which the dangerous petroleum is stored;

(i) if a council requires the holder of the licence, by notice in writing, to execute any repairs to any part of the installation which may be necessary for the safety of the premises in respect of which the licence is granted and of adjacent premises, the holder of the licence shall execute the same within such period as may be fixed by the notice;

(j) no artificial light other than a filament electric lamp may be used on the plot on which a storage shed is erected;

(k) no aircraft engine shall be run on the plot;

(l) all grass, bushes and scrub must be cut short to the satisfaction of a council, and no cultivation shall be allowed on the plot;

(m) such other conditions as may be prescribed by a council.

Storage other than in storage sheds

(2) The following conditions shall apply to dangerous petroleum stored upon premises other than in a storage shed:

(a) the area within which dangerous petroleum is or is intended to be stored shall be fenced to the satisfaction of a council, and the plot on which the fenced area lies shall be so situated or large enough to ensure a clear space of 15.24 metres in width around the fenced area;

(b) paragraphs (d), (e), (f), (h), (i), (k), (l) and (m) of sub-regulation (1) shall apply, mutatis mutandis, to such fenced area.

[Am by 281 of 1958;156 of 1959; 375 of 1961; 481 of 1964 and 446 of 1969.]

5. Soldering of filled tins

The soldering of any tin shall not be carried out on the premises.

6. Inspection of premises

A licensing officer or any officer deputed by him for the purpose or any police officer of or above the rank of Sub-Inspector may, at any reasonable hour, enter any premises in respect of which a licence for the possession of dangerous petroleum has been granted, for the purpose of inspecting the same.

[As amended by 69 of 1963; 481 of 1964 and 446 of 1969.]

7. Application for licenses to possess dangerous petroleum

(1) Every application for a licence to possess dangerous petroleum shall be in writing and shall be accompanied by a plan drawn to scale, showing the site of the installation and the design of the storage shed (if any), in all respects in sufficient detail to enable the project to be fully understood. The application shall be submitted to a licensing officer.

(2) Applications for licences for the possession of dangerous petroleum shall specify—

(a) the description and quantity of dangerous petroleum which the applicant desires to keep, and the manner in which it is proposed to store it;

(b) the name and position of the premises in which it is proposed to keep the dangerous petroleum, and whether the said premises fulfil the conditions required by regulation 4 in so far as they are applicable to such storage.

[As amended by 481 of 1964 and 446 of 1969.]

8. Expiration of licence

Every licence for the possession of petroleum shall expire on the 31st December of the year in which it is issued.

9. Possession of valid licence required

No person, unless he is in possession of a valid licence issued under these Regulations, shall on any premises store dangerous petroleum exceeding two hundred litres; and no person shall store dangerous petroleum for which a licence is required under these Regulations except in the manner prescribed in these Regulations and endorsed on the licence.

[As amended by 88 of 1948.]

10. Liability for expenses incurred through breach of Regulations

In addition to any penalty prescribed by the Act, a person convicted under these Regulations may be required to pay any expenses incurred by a council in consequence of any breach of these Regulations or of the conditions of any licence issued under these Regulations committed by such person, or in consequence of the failure by him to execute any work directed in accordance with these Regulations to be executed by him.

[As amended by 481 of 1964 and 446 of 1969.]

11. Renewal of licences

Every application for the renewal of a licence for the possession of dangerous petroleum shall be made in the same manner as an application for an original licence, except that a plan need not be submitted if it is certified that no alteration has been made to the premises described on the original plan submitted.

12. Prescribed fees

The following fee units shall be charged per annum or for any lesser period for licences for the possession of dangerous petroleum, namely—

(a) when the quantity to be stored exceeds two hundred litres, but does not exceed twenty two thousand seven hundred and thirty litres, thirty fee units;

(b) when the quantity to be stored exceeds twenty two thousand seven hundred and thirty litres, thirty fee units for each twenty two thousand seven hundred and thirty litres to a maximum of seventy five fee units.

[As amended by 88 of 1948 and Act 13 of 1994.]

13. Prescribed forms

Licences granted under these Regulations shall be in the forms prescribed in the Schedule.

14. Revocation of licences

Every licence granted under these Regulations may be revoked at any time by the Minister or by the officer who granted it, on its being established to the satisfaction of the Minister or of such officer that the licensee or any person in his employ has infringed any of the conditions of the licence or any provision of these Regulations.

[Am by GN 202 of 1964.]

15. Transport of dangerous petroleum

Dangerous petroleum shall be transported only if it is packed in airtight tins or other vessels not easily broken, or is contained in bottles securely corked and carefully packed so as to avoid risk of breakage.

16. Transport of dangerous petroleum in bulk

(1) No dangerous petroleum in bulk shall be conveyed by road vehicle to or from any store except in substantial and securely closed vessels of a suitable type, and no goods of an explosive or inflammable character shall be carried in the vehicle at the same time that dangerous petroleum is being so conveyed; such vehicle must be certified by a vehicle examiner as being fit for such transport.

(2) No dangerous petroleum in bulk shall be transported by road except in accordance with a licence issued by the Road Traffic Commissioner:

Provided that motor tank lorries used exclusively for the transport of petroleum may lawfully transport dangerous petroleum if licensed by the Road Traffic Commissioner under this proviso. Such licence shall expire on the 31st December of the year in which it is issued. A charge of seventy-five fee units shall be made for a licence under this proviso, which sum shall be additional to any licence fee payable under any other written law for the time being in force.

[As amended by 481 of 1964 and Act 13 of 1994.]

17. Powers of police and road traffic inspectors

Any police officer or road traffic inspector in uniform may at any time require the driver of a vehicle in which dangerous petroleum is being conveyed by road to stop and may inspect the vehicle for the purpose of ascertaining whether the provisions of these Regulations are being complied with.

[Am by 33 of 1965.]

18. No relief from liability for damage

Nothing in these Regulations shall be deemed to relieve any person from liability for damage caused by dangerous petroleum.

SCHEDULE

PRESCRIBED FORMS

[Regulation 13]

FORM 1

LICENCE TO POSSESS DANGEROUS PETROLEUM

No. ............................................................................

Fee ...........................................................................

Licence is hereby granted to ............................., for the storage in the premises described below of .......................... litres of dangerous petroleum, subject to the conditions prescribed by the Petroleum (General) Regulations.

This licence shall expire on the 31st December next following the date of issue hereof, and may be renewed on application being made for this purpose.

Description of premises above referred to: ................................................................................

...............................

Date of issue

.......................................

Licensing Officer

This licence is issued subject to the provisions of the Petroleum (General) Regulations, of which the holder admits cognizance.

[As amended by No. 481 of 1964 and No. 446 of 1969]

FORM 2

LICENCE TO TRANSPORT DANGEROUS PETROLEUM

No ............................................. Fee ............................................

Licence is hereby granted to ........................ for the transport of ............................... litres of dangerous petroleum from ...................... to ............................., subject to the conditions prescribed by the Petroleum (General) Regulations.

This licence shall expire on the 31st December next following the date of issue hereof, and may be renewed on application being made for this purpose.

..................................

Date of issue

....................................................

Road Traffic Commissioner

This licence is issued subject to the provisions of the Petroleum (General) Regulations, of which the holder admits cognizance.

[As amended by 481 of 1964.]{/mprestriction}

{{{_source.title}}} {{#_source.showPrice}} {{{_source.displayPrice}}} {{/_source.showPrice}}