Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

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4. Results: Answers
Oil & Gas
Legal and regulatory framework
What role does the national state play in the oil and gas industry in your jurisdiction? Are oil and gas rights owned by the state or is private ownership allowed?

Answer ... The Tunisian state plays a dual role in the oil and gas industry: a regulatory role and ownership of 100% of the national oil company, Entreprise Tunisienne des Activités Pétrolières (ETAP).

According to Article 6.1 of the Hydrocarbons Code, “prospecting work as well as exploration and exploitation activities may only be undertaken by virtue of a hydrocarbons title granted by the minister in charge of Hydrocarbons”. Private ownership (either Tunisian or foreign) of hydrocarbon titles is allowed. Applicants can be granted the following permits:

  • a prospecting licence;
  • a prospecting permit;
  • an exploration permit; and
  • an exploitation permit (concession).

According to Article 92 of the Hydrocarbon Code, no exploration permit can be granted to a private entity except in association with ETAP.

An applicant for an exploration permit must include in its application an option for ETAP to participate in any permit under the terms specified in the Hydrocarbons Code and the applicable conventions. A joint venture formula with ETAP can be chosen. In this case, ETAP will participate in the permit to a maximum rate set by the convention. In the event of an oil or gas deposit discovery, ETAP will reimburse the company for expenditures incurred in exploration and exploitation up to its participation rate in the concession.

The Hydrocarbons Code also provides for the possibility of concluding a production sharing agreement with ETAP if ETAP owns the permit and the foreign investor qualifies as an ‘entrepreneur’.

For more information about this answer please contact: Samir Abdelly from Abdelly & Associates
Which national legislative and regulatory provisions govern the oil and gas industry in your jurisdiction?

Answer ...

  • Beylical Decree of 13 December 1948 establishing special provisions to facilitate the exploration and exploitation of mineral substances of the second group, as amended by Law58-36 of 15 March 1958;
  • Beylical Decree of 1 January 1953 related to mining, together with the texts on its application;
  • Decree-Law 85-9 of 14 September 1985 instituting special provisions related to the exploration and exploitation of liquid and gaseous hydrocarbons, as amended by Law 87-9 of 6 March 1987; and
  • The Hydrocarbon Code, which was promulgated by Law 99-93 dated 17 August 1999, as amended, most recently by Law2017-41 of 30 May 2017.

For more information about this answer please contact: Samir Abdelly from Abdelly & Associates
What other national legislative and regulatory provisions have relevance for oil and gas activities in your jurisdiction?

Answer ...

  • Law90-56 of 18 June 1990 on the exploration and production of liquid and gaseous hydrocarbons;
  • Decree2000-713 of 5 April 2000 on the composition and functioning of the Consultative Committee of Hydrocarbons (CCH);
  • Decree 2000-946 of 2 May 2000 on the details and number of the summit references of the elementary perimeters constituting hydrocarbon titles;
  • Order of the Ministry of Industry of 15 February 2000 on the submission and instruction of claims of hydrocarbon titles; and
  • Law 88-91 of 2 August 1988 creating the National Agency of Environment Protection, which introduced the obligation to conduct an environmental impact study (EIS).

For more information about this answer please contact: Samir Abdelly from Abdelly & Associates
Are there any regional treaties or laws that need to be taken into account?

Answer ... Article 59 of the Hydrocarbons Code requires exploration permit and concession holders to comply with existing requirements on health and safety, environmental protection, water and forestry. In the absence of other requirements, the titleholder must:

  • complete an EIS;
  • enact measures to protect the environment and respect the commitments made in the EIS;
  • obtain insurance to cover the risk of harmful impacts to the surroundings or third parties; and
  • take measures necessary to protect human life and the environment in case of extraordinary circumstances due to the titleholder’s behaviour or natural phenomena.

Titleholders are subject to the relevant legislation on the conservation and use of water discovered through their activity in compliance with the Water Code (Law 75-16 dated 31 March 1975, as amended by Law 87-35 dated 6 July 1987 and Law 2001-116 dated 26 November 2001).

Other potentially relevant legislation includes:

  • the Forestry Code (Law 88-20 dated 13 April 1988, as modified and supplemented by Law 2005-13 dated 26 January 2005);
  • the Water and Soil Conservation Law (Law 1995-70 dated 17 July 1995);
  • the Waste Management Law (Law 96-041 dated 10 June 1996 relating to waste and its management and suppression) and its implementing regulations; and
  • the Air Quality Law (Law 2007-34 dated 4 June 2007).

For more information about this answer please contact: Samir Abdelly from Abdelly & Associates
Which national regulatory bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

Answer ... The hydrocarbons regulations are enforced by the General Direction of Hydrocarbons (DGH) and the CCH, which operates under the aegis of the Ministry of Industry, Energy and Mining.

The DGH represents the granting authority within the meaning of the Hydrocarbons Code and is in charge of the following activities, upon a binding opinion of the CCH:

  • the grant of hydrocarbon titles;
  • the grant of extension and renewal of hydrocarbon titles; and
  • the authorisation of the assignment of interests within hydrocarbon titles.

The DGH has the following powers, among others:

  • to require at any time a guarantee for the performance of minimum work obligations;
  • to require the titleholder to assign to the granting authority a discovery deemed exploitable if the titleholder has not developed that discovery within six years (liquid hydrocarbons) or eight years (gaseous hydrocarbons) of the discovery date;
  • to purchase with priority the hydrocarbons production required to meet national consumption needs up to 20%;
  • to authorise pipeline construction works;
  • to authorise the use of the public domain for exploration and production activities;
  • to control and follow up on service companies operating in the hydrocarbon sector;
  • to control all prospecting, exploration and exploitation activities;
  • to forbid any works that violate the Hydrocarbons Code; and
  • to order the immediate cessation of works in case of a breach of safety or environmental requirements.

These powers are controlled by the Tunisian Parliament and its Energy Committee, pursuant to Article 13 of the 2014 Constitution, which provides as follows: “Natural resources belong to the people of Tunisia. The State exercises sovereignty over them in the name of the people. Investment contracts related to these resources shall be presented to the competent committee in the Assembly of the Representatives of the People. The agreements concluded shall be submitted to the Assembly for approval.”

For more information about this answer please contact: Samir Abdelly from Abdelly & Associates
What is the national regulators’ general approach in regulating the oil and gas industry?

Answer ... In the 1980s, the oil regulations were significantly affected by globalisation. A new Hydrocarbons Code was duly enacted in 1999, which sets forth the basic standards and requirements for prospecting, exploration and production activities in Tunisia.

Many implementation decrees have been enacted to enforce and clarify the main provisions of the Hydrocarbons Code, such as those on:

  • the calculation of royalties;
  • the submission of concession and permit claims; and
  • the conditions for crude oil and oil product transport, refining, distribution, storage, import and export.

Tunisia has significantly reformed its oil and gas legislation to make it compliant with global environmental, health and safety standards. Therefore, alongside its policy of incentivising exploration and production, the government has enacted a raft of laws and decrees relating to health, safety and environmental requirements, in accordance with the commitments that Tunisia has undertaken under international anti-pollution conventions.

For more information about this answer please contact: Samir Abdelly from Abdelly & Associates
What role do provincial, state and/or other local government regulatory bodies play in the regulation of the oil and gas industry?

Answer ... Local communities have no jurisdiction in oil and gas matters, which are the exclusive preserve of the Tunisian state, except in relation to the collection of local taxes and the authorisation of use of lands that belong to them.

For more information about this answer please contact: Samir Abdelly from Abdelly & Associates
Oil & Gas