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Exploration Activities Map

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Licencing

  • Permits and Rights Open or Close

    TYPES OF RIGHTS AND PERMITS IN TERMS OF THE MPRDA
    There are two types of permits and two types of rights which may be issued under the MPRDA:

    • Technical Cooperation Permit
      A Technical Cooperation Permit issued in terms of section 77(1) of the MPRDA allows the holder to carry out desktop studies, acquire existing seismic and other data from other sources, including the Agency but does not include any exploration activities.
      The permit is valid for a period of 1 year and is not renewable or transferable.

    • Reconnaissance Permit
      A Reconnaissance Permit issued in terms of section 75(1) of the MPRDA allows the holder to undertake only geological, geophysical or photogeological surveys and any remote sensing techniques.
      The permit is valid for a period of 1 year and is not renewable or transferable.

    • Exploration Right
      An Exploration Right issued in terms of section 80 of MPRDA allows the holder to carry out the entire value chain of petroleum exploration such as, acquisition and processing of new geological/geophysical data, reprocessing of existing geological/geophysical data and any other related activity to define a trap to be tested by drilling, logging and testing, including well appraisal activities.
      The right is valid for a period of 3 years, renewable for three two-year term, transferable and can be encumbered by mortgage.

    • Production Right
      A Production Right issued in terms of section 84 of MPRDA allows the holder to conduct any operation, activity or matter that relates to the exploration, appraisal, development and production of petroleum.
      The right is valid for a period of 30 years, renewable for further periods each not exceeding 30years, is transferable and can be encumbered by mortgage.
  • Fiscal Terms Open or Close

    South African Oil & Gas Fiscal Terms

    The key provisions are:
    An annual exploration fee, royalty and income tax, state participation, BEE participation in production and an annual contribution to the Upstream Training Trust.

    Annual Exploration Fee:
    - Onshore rights - starts at R1/hectare with a minimum of R1000 and escalates in 50c/hectare increments each year.
    - Offshore right - starts at R200 000/sq degree pro rata with a minimum of R50 000 and escalates annually in line with the South African Consumer Price Index (CPI).

    Royalty
    Royalty is payable in terms of the Mineral and Petroleum Resources Royalty Act. The rate is variable based on profitability with a minimum rate of 0.5% and a maximum of 5% per annum.

    Income Tax is payable
    Income tax is payable in terms of the Income Tax Act, Schedule 10 of which contains additional provisions applicable only to the upstream petroleum sector, and will not exceed 28%. All expenditure and losses incurred will be allowed as deductions. In addition, a further 100% of all capital expenditure incurred for exploration and 50% in respect of post exploration is allowed as a deduction for the purposes of calculating income tax liability. This amounts to 150% of capital expenditure for exploration and post exploration. All allowable costs (both operational and capital) may be immediately expensed for income tax purposes.

    Guarantees
    Both the Income Tax Act and the Mineral and Petroleum Royalty Act make provision for the Minister of Finance to enter into a contract guaranteeing that for the duration of the right (including any production right flowing from an exploration right, but excluding renewal of a production right) the terms of the Tenth Schedule and Royalty Act will be no more stringent than at date of signature.

    Customs Duties and Exchange Control
    The Customs and Excise Act makes provision for the full rebate of customs duties on imported goods and equipment for use in the upstream sector. Oil and gas companies are also exempt from the normal restrictions on operating Customer Foreign Currency Accounts.

    State Participation and BEE Participation Interest
    State participation of 10% at the production stage, carried through exploration, will be through PetroSA. A further 10% interest will be made available on commercial terms for participation by BEE companies (Black Economic Empowerment companies). This may be taken up by PetroSA in the absence of any BEE participants.

    Annual Upstream Training Trust Donation
    Onshore rights:-
    R1/ hectare with a minimum of R1000.

    Offshore rights:-
    US$100 000 for the initial period and each subsequent renewal.

  • Guidelines Open or Close

     

    Compliance with the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002) (“MPRDA”) and any other relevant legislation is important.  Therefore, the Agency has developed guidelines intended to assist both applicants and holders of permits/right holders to comply fully with MPRDA and any other relevant legislation.
    Prospective applicants and holders of permits/rights are advised to read the following guidelines together with MPRDA and any other relevant legislation:

    Application guidelines

    Environmental Impact assessment

    Social and Labour plan guidelines

  • Forms Open or Close
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