Royal Decree Number: M / 37 – Establishing the Hydrocarbon System

Last updated: 23 December 2020

Under this law, all hydrocarbon deposits and hydrocarbon resources are the property of the state. As such, the state exercises permanent sovereignty over such resources, and it uses them for its interest, security, and economic development (Articles 3, 4). Furthermore, all hydrocarbon operations can only be conducted with prior authorisation by way of a licence.


It empowers the Ministry of Energy, Industry and Mineral Resources with the responsibility for implementing the provisions of the law, including: issuing production licenses; overseeing matters related to the environment, security and safety in the hydrocarbon industry; monitoring the licensees` commitment to international regulations, industry practices, environmental standards, and health-related matters.


It also defines that the state shall set production limits and determine the level of maximum sustainable production for hydrocarbons.


Permit holders are responsible for taking all adequate procedures to ensure the safety of hydrocarbon operations and related facilities, in accordance with applicable international industry standards and regulations. Licensees must also take necessary precautions to prevent waste and leakage of hydrocarbons and damage during well drilling, repair, or workover. Operators must notify the competent ministry as soon as possible of any event that may impact water resources or hydrocarbon reserves and take all necessary steps to manage such impacts.  Licensees must also file a written report following incidents, stating the measures taken to control the incident and estimating the quantity of hydrocarbons that were lost.


The law also imposes measurement and reporting requirements regarding the hydrocarbon produced. Companies must maintain correct and complete records showing quantities and information of production volumes, hydrocarbons stored, sold, or used. The law stipulates that measurement devices must be approved by the Ministry and are subject to inspection.

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