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Mme. Wafae Benhammou Petroleum Participation Manager PowerPoint Presentation
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Mme. Wafae Benhammou Petroleum Participation Manager

Mme. Wafae Benhammou Petroleum Participation Manager

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Mme. Wafae Benhammou Petroleum Participation Manager

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  1. Not an official UNCTAD record ATTRACTING FOREIGN INVESTMENT IN THE UPSTREAM Mme. Wafae Benhammou Petroleum Participation Manager

  2. CONTENTS • BUSINESS CLIMATE • HOW TO EXPLORE IN MOROCCO • FISCAL REGIME • AGREEMENTS

  3. BUSINESS CLIMATE GLOBAL VISION

  4. BUSINESS CLIMATE GLOBAL VISION • SUSTAINABLE DEVELOPMENT. • GROWING MARKET – ORIENTED ECONOMY BASED ON: LIBERALIZATION , PRIVATIZATION, DISINVESTMENT OF THE STATE, ECONOMY EASILY INTEGRATED IN THE WORLD GLOBAL ECONOMY • MODERN ADMINISTRATION WITH HIGH QUALITY OF RESPONSIVENESS TO BUSINESS CONCERN AND TO CITIZENS NEEDS IN GENERAL • ENHANCEMENT OF ESTABLISHED DEMOCRATIC INSTITUTIONS

  5. BUSINESS CLIMATE GLOBAL STRATEGY • A STRATEGY BUILT AROUND CLEAR GOALS IS SET, • INSTRUMENTS AND TOOLS IN TERMS OF LAWS AND REGLEMENTATION ARE ENFORCED , • REFORMS AND RE-STRUCTURATION OF CRUCIAL SECTORS ARE IMPLENTED TO ENHANCE AN INCENTIVE GLOBAL ENVIRONMENT TO DO BUSINESS.

  6. BUSINESS CLIMATE OBJECTIVES OF THE GLOBAL STRATEGY • IMPROVE ECONOMIC, SOCIALAND POLITICALENVIRONMENT ; • ENHANCE STANDARDS OF LIVING ; • INTEGRATE THE GLOBALISATION OF THE WORLD ECONOMY. • SUSTAIN A HIGH GROWTH RATE OF DEVELOPMENT ; TO CATCH UP WITH THE FUTURE DEVELOPMENT AND TO MEETTHE CHALLENGE OF CONTINUOUS GROWTH THE GOVERNMENT IS UNDERTAKING POWERFUL ACTIONS TO ALLEVIATE POVERTY , TO REMOVE ILLITERACY , TO UP-GRADE ECONOMY … THE UTMOST FINAL GOAL IS TO ACHIEVE WEALTH AND PROSPERITY.

  7. BUSINESS CLIMATE ENERGY SECTOR GLOBAL STRATEGY • REINFORCEMENT OF ELECTRICAL SUPPLY • NETWORK WHICH STARTED BY : • THE FIRST IPP LICENSE GRANTED TO THE HOLDING ABB-CMS ,CONTRACT IN 1997. • RESTRUCTURING OF THE NATIONAL OFFICE OF ELECTRICITYO.N.E. • LARGE RURAL ELECTRIFICATION PROGRAMME

  8. BUSINESS CLIMATE ENERGY SECTOR GLOBAL STRATEGY • OIL PRODUCTS POLICY: • PRIVATIZATION IN 1994 OF OIL PRODUCTS REFINING PLANTS SUPPLY FIRMS • TARIF AND TAX REFORMS OF THE ENERGY PRODUCTS IN 1995 AND 1996 • PROMULGATING A NEW HYDROCARBON LAW.

  9. is a country of • peace and stability • rights and democracy, • modernity and tradition, • tolerance and openess, • ….. MOROCCOis a ground of all the people and all the religions BUSINESS CLIMATE GLOBAL ENVIRONMENT MOROCCO MOROCCO

  10. HOW TO EXPLORE IN MOROCCO

  11. HOW TO EXPLORE IN MOROCCO HYDROCARBON CODE • SINCE 1958 CODE CONTINUAL EFFORTS HAVE BEEN MADE TO • ATTRACT FOREIGN OIL COMPANY INVESTMENT • CHANGES MADE IN THE 1992 CODE WERE INSUFFICIENT • HYDROCARBON CODE WAS AGAIN CHANGED IN EARLY 2000 • LAW 21-90 AMENDED AND COMPLETED BY LAW 27-99 • DECREE 2-93-786 AMENDED AND COMPLETED BY DECREE 2-99-210

  12. HOW TO EXPLORE IN MOROCCO RECONNAISSANCE LICENCE DURATION 1 YEAR MAX, EXTENDIBLE GRANT ENERGY MINISTER WORKS INCLUSIVE OF SEISMIC BUT NO DRILLING AREA UNLIMITED ASSIGNMENT NOT PERMITTED

  13. HOW TO EXPLORE IN MOROCCO EXPLORATION PERMIT EXPLORATION RIGHTS EXCLUSIVE RIGHTS, INCLUDING DRILLING, GRANTED BY MINISTERIAL ORDER AFTER SIGNING A PETROLEUM AGREEMENT DURATION 8 YEARS IN 2 OR 3 PERIODS WITH POSSIBLE EXTENSION OF 2 YEARS FOR APPRAISAL OF DISCOVERY MADE IN THE LAST TWO YEARS OF VALIDITY. AREA MIN - 200 KM2, MAX - 1000 KM2 FOR EACH ON SHORE PERMIT MIN - 200 KM2, MAX - 2000 KM2 FOR EACH OFFSHORE PERMIT PERMIT HOLDER MAX. ACREAGE = 10,000 KM2 ONSHORE PERMIT HOLDER MAX. ACREAGE = 20,000 KM2 OFFSHORE

  14. HOW TO EXPLORE IN MOROCCO EXPLORATION PERMIT (Cont’) RELINQUISHMENT AT END OF INITIAL PERIOD 10% * NUMBER OF YEARS COMPLETED FOR EXAMPLE 30% AFTER 3 YEARS

  15. HOW TO EXPLORE IN MOROCCO EXPLOITATION CONCESSION PRODUCTION RIGHTSDEVELOPMENT AND EXPLOITATION OF COMMERCIAL DISCOVERY DURATION 25 YEARS + EXTENSION OF UP TO 10 YEARS

  16. FISCAL REGIME

  17. FISCAL REGIME STATE PARTICIPATION 25% MAX IN ANY EXPLORATION PERMIT OR EXPLOITATION CONCESSION STATE IS CARRIED THROUGH EXPLORATION WITH NO REIMBURSEMENT OF PAST EXPLORATION COSTS PARTICIPATION INTEREST FINANCING

  18. FISCAL REGIME ROYALTY THE ROYALTY RATES ARE AS FOLLOWS : ONSHORE AND OFFSHORE <200 METERS WATER DEPTH THE FIRST THREE HUNDRED THOUSAND OF OIL AND 300 MILLION M3 OF GAS PRODUCED FROM EACH EXPLOITATION CONCESSION ARE EXEMPTED OFFSHORE >200 METERS WATER DEPTH THE FIRST 500,000 TONS OF OIL AND 500 MILLION M3 OF GAS PRODUCED FROM EACH EXPLOITATION CONCESSION ARE EXEMPTED OIL 10% GAS 5% OIL 7% GAS 3.5%

  19. FISCAL REGIME RENTAL AT APPLICATION AND EXTENSION FOR EACH EXPLOITATION CONCESSION TAX DEDUCTIBLE 1,000 DIRHAMS/KM2 (APPROX. $100)

  20. FISCAL REGIME TAXATION OF PROFITS • OIL COMPANIES ARE SUBJECT TO INCOME TAX UNDER • THE GENERAL TAX CODE • HOWEVER, UNDER THE NEW HYDROCARBON LAW THERE • ARE : • FROM START OF COMMERCIAL PRODUCTION • FROM EACH EXPLOITATION CONCESSION • THAT ALLOWS EXPLORATION COSTS, • INCLUDING DRY HOLE COSTS, TO BE DEDUCTED AGAINST REVENUES • OF ANY EXPLOITATION CONCESSION HELD BY THE TAX PAYER TWO NEW INCENTIVES 10-YEARS TAX HOLIDAY CONSOLIDATION THE TAX RATE IS 35% OF TAXABLE INCOME

  21. FISCAL REGIME TAX DEDUCTIONS AND ALLOWANCES TAXABLE INCOME IS DETERMINED BY MAKING THE FOLLOWING : ACCORDING TO RATES IN THE TAX CODE DEPLETION ALLOWANCE (PRG) OPTIONAL DEDUCTIONS ROYALTY, RENTAL, BONUSES, TRAINING EXPENSES PRODUCTION EXPENSES AMORTISATION NEGOTIABLE IN PETROLEUM AGREEMENT- MIN. 2 YEARS MAX. 10 YEARS DEPRECIATION OF FIXED ASSETS

  22. FISCAL REGIME OTHER TAXES TAX EXEMPTIONS • WITHHOLDING TAX ON PROFITS • VALUE ADDED TAX • BUSINESS ACTIVITY TAX • URBAN TAX • TAX ON NON-IMPROVED URBAN LAND

  23. FISCAL REGIME CUSTOMS AND EXCHANGE CONTROL IMPORT DUTY THE OIL COMPANY, ITS CONTRACTORS AND SUB-CONTRACTORS MAY IMPORT ITEMS FOR USE IN MOROCCO DUTY-FREE IF THERE IS NO COMPETITIVE SUPPLIER IN MOROCCO SAME APPLIES TO PERSONAL EFFECTS BROUGHT IN BY FOREGN PERSONNEL EXCHANGE CONTROL TRANSFER OF CAPITAL, PROFITS AND DIVIDENDS FREE OF RESTRICTION AND TAXES RIGHT TO HOLD EXPORT REVENUES ABROAD

  24. AGREEMENTS

  25. AGREEMENTS PETROLEUM AGREEMENT PARTIES STATE REPRESENTED BY ONAREP AND THE OIL COMPANY(IES) MAIN ASSURANCES ASSIGNMENT ARBITRATION MARKET PRICE

  26. AGREEMENTS PETROLEUM AGREEMENT (Cont’) • NEGOTIABLE ELEMENTS • WORK PROGRAMME • BONUSES • TRAINING BUDGETS • AMORTISATION • BONUSES • UPON EACH COMMERCIAL DISCOVERY • ON REACHING AGREED PRODUCTION LEVELS • NEGOTIABLE (IN $US) AND TAX DEDUCTIBLE

  27. Agreements PETROLEUM AGREEMENT (Cont’) COMMITMENT TO FUND FOR ONAREP PERSONNEL PROFEESIONAL TRAINING NEGOTIABLE US$ AMOUNT EACH YEAR FROM EFFECTIVE DATE INCREASES FOR EVERY EXPLOITATION CONCESSION GRANTED

  28. AGREEMENTS ASSOCIATION CONTRACT PARTIESONAREP AND OIL COMPANY(IES) PURPOSE TO ESTABLISH PROCEDURES NECESSARY FOR EFFICIENT JOINT CONDUCT OF OPERATIONS MAIN CLAUSESMANAGEMENT COMMITTEE / JOINT OPERATING COMPANY OPERATOR CASH CALLS AND ACCOUNTING ANNEX BASED ON AIPN MODEL FORM JOINT OPERATING AGREEMENT