License Recognition
- Granted by decision of Ministry in charge of Energy, upon the conclusion of a reconnaissance Contract (specifying terms: validity period, area, etc.)
- Once the reconnaissance works are performed, the parties may decide to begin exploration works. In this case, a petroleum agreement sets out the respective rights and obligations of the parties.
Exploration permit
- Following the signature of the petroleum agreement between ONHYM and the petroleum company, a joint permit application is filled;
- An Association Contract (a joint operating agreement) is signed concurrently with the Petroleum Agreement, to organize relationships between the parties;
- The Minister in charge of Energy “MEM” grants exploration permits through a ministerial order within 60 days of the application filling date.
- The Petroleum Agreement is approved by joint order of the MEM and Minister in charge of finance (MF);
Concession operation
- In case a hydrocarbon discovery is made that unveils commercially exploitable quantities, the holders of the exploration permit are entitled to request an exploitation concession relating to the deposit so discovered, provided that all contractual and technical obligations are performed
- The concession is awarded by Decree of Prime Minister following approval of the request by the MEM
Entry requirements
- Pursuant to the Hydrocarbon Code, any petroleum company may conduct reconnaissance, exploration and exploitation activities in Morocco. Such petroleum company must evidence its technical and financial capabilities to carry out the exploration works agreed with ONHYM and undertake to fulfil a minimum work program with a corresponding financial commitment;
- Moroccan legislation and regulations apply equally to both local and foreign companies.
Services
Our Exploration Services
THE GHARB BASIN
- Government interest share of a maximum of 25 %;
- A total exemption from corporate income tax on production for a consecutive ten-year period;
- A total perpetual exemption from all duties and taxes on the importation of equipment, materials and consumables, and a total perpetual exemption from VAT and all other taxes, except withholding tax;
THE ESSAOUIRA BASIN
- Exemption from the tax on income from shares, capital rights and similar revenues on the profits and dividends of the companies holding a producing concession and shareholders of these companies;
- The profits and dividends are freely transferable outside Morocco without limitation for foreign entities;
- The royalty rates vary between 10% and 7% for oil and 5% and 3.5% for gas, depending on the location of the producing field (whether in onshore and shallow offshore, or in deep offshore). In either case, the first 300,000 Tons of oil and 300 million m3 of gas or the first 500,000 Tons of oil and 500 million m3 of gas produced from each exploitation concession, respectively, are exempted;
- Surface rental of an amount equivalent to US$100 for each exploration permit and each square kilometre of an exploitation concession.
Data-driven Insights
- Proven track record in
- Expertise in both startups
- Strategic guidance for
Reconnaissance Contract
- Duration: The maximum duration of the license is one year. This term is renewable once or several times
- Awarding method: The license is awarded by Decision of the Minister in charge of Energy;
- Reconnaissance work programme: This contract provides for geological and geophysical studies with the exception of drilling
- Size of the area: The size of the area associated with this contract is negotiable. There is no size limit;
- Transfer rights: Interest shares are not transferrable. Exclusivity of the Reconnaissance License is negotiable.
Petroleum Agreement
- Duration: Maximum of eight years, divided into two or three periods (initial period and first and/or second extension periods). Possibility of an exceptional two-years extension in the event of discovery during the 8th year of permits validity;
- Awarding method:The permit is awarded by Order of the Minister in charge of Energy following the approval of the Petroleum agreement by Joint Order of the Minister in charge of Energy and the Minister in charge of Finance;
- Work programme: The work programme includes geological and geophysical studies as well as seismic surveys and drilling;
- Size of the area: At least 200 km² and maximum 2,000 km² for each Exploration Permit. The maximum cumulative acreage a single company can hold is 10,000 km² onshore and 20,000 km² offshore. Surface relinquishment is necessary during the transition to the first or second extension periods.
Data-Driven Approach
Besides the conclusion of the Petroleum Agreement, ONHYM and its partners sign an Association Contract (JOA) with the objective of providing appropriate measures necessary for the various stakeholders to carry out hydrocarbon exploration and exploitation and to establish the procedures necessary for the proper conduct of operations and the management of relations between those stakeholders.
Legislation
With its very attractive and favorable regulatory terms, Morocco is one of the top destinations for investor in term of risk/reward ratio. Morocco has also undertaken constitutional reforms and legislative amendments that lead to its business attractiveness.
ONHYM plays the central role of a one-stop shop for oil companies interested in exploring Morocco’s hydrocarbon potential, and improves awareness of the legislation and regulation governing the upstream sector as follows:
UPSTREAM SECTOR
The Hydrocarbon Code
composed of :
• Law n°21-90 relating to the exploration and exploitation of hydrocarbon deposits, enacted by Dahir n°1-91-118 dated April 1, 1992, as amended by law n°27-99 enacted by Dahir n°1-99-340 dated February 15, 2000 .
• Decree n°2-93-786 dated November 3, 1993 implementing the Hydrocarbon Law, as amended by Decree n°2-99-210 dated March 16, 2000.
GENERAL TAX CODE
TREATIES
As part of the effort to encourage investment, Morocco signed and ratified the international instruments enabling implementation of arbitral awards, i.e. the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the 1965 International Convention on settlement of Investment Disputes between States and nationals of other States and the agreement with the European Union establishing a dispute settlement mechanism entered into in 2011.
Morocco grants the right to IOCs to recourse to arbitration for dispute settlement.
As for taxation, Morocco has signed 76 treaties on the avoidance of double taxation with countries and regional and international communities.
INCENTIVES
IOCs willing to operate in Morocco benefit from a very advantageous business environment granting multiple incentives:
• Government interest share of a maximum of 25 %.
• A total exemption from corporate income tax on production for a consecutive ten-year period as from the start of the regular production.
• A total perpetual exemption from all duties and taxes on the importation of equipment, materials and consumables, and a total perpetual exemption from VAT and all other taxes, except withholding tax.
• Exemption from the tax on income from shares, capital rights and similar revenues on the profits and dividends of the companies holding a producing concession and shareholders of these companies.
• Free transfer of the profits and dividends outside Morocco without limitation for foreign entities.
