CHAPTER 67:01
PETROLEUM (EXPLORATION AND PRODUCTION)

ARRANGEMENT OF SECTIONS

   SECTION

PART I
Preliminary

   1.   Short title

   2.   Interpretation

   3.   Non-application to certain minerals

   4.   Petroleum vested in State

   5.   Constitution of blocks

PART II
Administration

   6.   Prohibition of disclosure of information

   7.   Public officer not to acquire or hold certain rights

   8.   Indemnity of officers

   9.   Retention of cores and samples

   10.   Preference for Botswana products, etc.

PART III
Licences

General

   11.   Restrictions on persons to whom licence may be granted

   12.   Agreement with respect to grant, etc. of licences

   13.   Applications to be made to Minister

   14.   Powers of Minister to obtain information

   15.   Form of licence

   16.   Reservation of blocks

Exploration Licences

   17.   Application for exploration licence

   18.   Disposal of application for exploration licence

   19.   Notification of grant or rejection

   20.   Form and content of exploration licence

   21.   Rights conferred by exploration licence

   22.   Term of exploration licence

   23.   Application for renewal of exploration licence

   24.   Application for renewal to be in respect of reduced area

   25.   Grant or refusal of renewal of exploration licence

   26.   Renewal of exploration licence in respect of locations

   27.   Conditions of grant of exploration licence

Discovery of Petroleum in Exploration Area

   28.   Discovery of petroleum to be notified

   29.   Directions of Minister on discovery of petroleum

   30.   Nomination of block for purpose of declaring location

   31.   Declaration of location

   32.   Investigations of locations

   33.   Removal and disposal of petroleum

Development Licences

   34.   Application by registered holder of exploration licence for development licence

   35.   Application for development licence

   36.   Disposal of application for development licence

   37.   Restrictions on grant of development licence

   38.   Notice of decision on application for development licence

   39.   Content of development licence

   40.   Rights conferred by development licence

   41.   Duration and renewal of development licence

   42.   Revocation of declaration of location

   43.   Unit development

   44.   Directions as to recovery of petroleum

   45.   Trading in development area

Restrictions on Exercise of Rights under Licences

   46.   Restrictions on exercise of rights

Surrender, Cancellation or Suspension of Licences

   47.   Surrender of area or part thereof covered by licence

   48.   Minister's power to suspend or cancel a licence

Transfers and Registration

   49.   Records

   50.   Interest in licence to be created by instrument in writing

   51.   Transfer, etc. of licence to be approved by Minister

   52.   Minister may require additional information

   53.   Evidence

Miscellaneous

   54.   Application of Schedule

   55.   Work practices for registered holder of licence

   56.   Work practices for holder of notice of consent

   57.   Wasteful production and processing practices

   58.   Penalty for breach of section 55 or 56

   59.   Maintenance, etc. of property

   60.   Drilling near boundaries

   61.   Directions

   62.   Compliance with directions

   63.   Removal of property, etc. by registered holder

   64.   Removal and sale of property, etc. by Minister

   65.   Penalty for default in payment

   66.   Survey of wells, etc.

   67.   Scientific investigations

   68.   Restriction on transfer of shares

PART IV
Surface Rights

   69.   Right to graze stock, etc.

   70.   Acquisition of exclusive rights by registered holder of development licence

   71.   Compensation for disturbance of rights, etc.

   72.   Compulsory acquisition of land

PART V
Financial

   73.   Royalty on petroleum obtained under development licence

   74.   Provisional royalty

   75.   Prohibition on disposal of petroleum

   76.   Remission of royalty, etc.

   77.   Recovery of royalty, etc.

   78.   Annual fee in respect of licence

   79.   Security for compliance

PART VI
Miscellaneous

   80.   Minister may require information to be furnished

   81.   Failure to furnish information, etc. under section 80

   82.   Power of entry, etc.

   83.   Offences in relation to section 82

   84.   Obstruction of registered holder of licence

   85.   Offence committed by company

   86.   Miscellaneous offences

   87.   General penalty

PART VII
Regulations

   88.   Regulations

      Schedule - Records, Reports and Accounts

Act 12, 1981
S.I. 56, 1983.

An Act to make provision relating to the exploration for and exploitation of petroleum resources and for purposes incidental thereto or connected therewith.

[Date of Commencement: 13th May, 1983]

PART I
Preliminary
(ss 1-5)

1.   Short title

   This Act may be cited as the Petroleum (Exploration and Production) Act.

2.   Interpretation

   (1) In this Act, unless the context otherwise requires-

   "authorized officer" means a person appointed under section 88;

   "block" means a block constituted as provided by section 5;

   "development area" means an area of land subject to a development licence;

   "development licence" means a licence granted under section 36;

   "development operations" means operations for or in connection with the production of petroleum;

   "drilling" means the perforation of the earth's surface, whether the hole is vertical, inclined or horizontal, and includes all operations for preventing the collapse of the sides of the hole or for preventing the hole from becoming filled by any extraneous material (including water) and the fitting of wellheads, or coring or logging, and any operations incidental thereto;

   "exploration area" means an area of land subject to an exploration licence;

   "exploration licence" means a licence granted under section 18;

   "exploration operations" means operations for or in connection with the exploration for petroleum;

   "good oil field practices" means those things which are generally accepted as good, safe and efficient in the carrying on of exploration or development operations;

   "in default" means in breach of a provision of this Act or of a condition of a licence, or of a condition of an agreement under section 12;

   "land" includes land beneath water;

   "licence" means an exploration or a development licence;

   "location" means a block in respect of which a declaration under section 31 is in force;

   "petroleum" means any naturally occurring-

   (a)   hydrocarbon;

   (b)   mixture of hydrocarbons; or

   (c)   mixture of one or more hydrocarbons and any other substance,

whether in gaseous, liquid or solid form, and includes petroleum which has been returned to a natural reservoir, but does not include coal or a substance which may be extracted from coal;

   "petroleum reservoir" means a natural occurring discrete accumulation of petroleum in any form whatsoever;

   "processing" does not include refining of petroleum;

   "registered holder", in relation to a licence, means the person whose name is for the time being recorded pursuant to section 49 or 51(5);

   "well" means a hole made by drilling in land or the subsoil of land in connection with exploration or development operations, but does not include a seismic shot hole.

   (2) Where in this Act provision is made for a matter to be referred to arbitration-

   (a)   the matter shall be referred to a single arbitrator appointed by the parties;

   (b)   in the event of the parties being unable to agree on a single arbitrator, each party shall choose an arbitrator, and the arbitrators so chosen shall choose an umpire;

   (c)   the arbitration proceedings shall be conducted in accordance with the Arbitration Act.

   (3) Where in this Act any application, report or other document is required to be submitted to the Minister, such application report or document shall be submitted-

   (a)   in the case of an exploration licence, through the Director of Geological Survey; and

   (b)   in the case of a development licence, through the Mining Commissioner.

3.   Non-application to certain minerals

   A right to search for or mine any mineral, as defined in section 2 of the Mines and Minerals Act, shall not be granted or exercised under this Act.

4.   Petroleum vested in State

   (1) The entire property in and control over petroleum in any land are hereby vested in the Republic.

   (2) Subject to section 67, no person shall carry on in any land any exploration or development operations except under and in accordance with a licence granted under this Act.

   (3) Any person who contravenes any provision of subsection (2) shall be guilty of an offence and liable on conviction-

   (a)   in the case of an individual, to a fine not exceeding P1000 or to imprisonment for a term not exceeding two years, or to both; or

   (b)   in the case of a company, to a fine not exceeding P10 000.

5.   Constitution of blocks

   (1) For the purposes of this Act the surface of the earth shall be deemed to be divided into sections by the-

   (a)   meridian of Greenwich and meridians which are at a distance from that meridian of five minutes or a multiple of five minutes of longitude; and

   (b)   equator and parallels of latitude which are a distance from the equator of five minutes or a multiple of 5 minutes of latitude,

each of which is bounded by portions of two of those-

      (i)   meridians which are at a distance from each other of five minutes of longitude; and

      (ii)   parallels of latitude which are at a distance from each other of five minutes of latitude.

   (2) Where a block constituted as provided in subsection (1) would include land in Botswana and land outside Botswana, the block shall be treated as being constituted by land in Botswana.

PART II
Administration
(ss 6-10)

6.   Prohibition of disclosure of information

   (1) No person shall disclose any information obtained by him or in connection with the administration of this Act except where the disclosure is made-

   (a)   for or in connection with the administration of this Act;

   (b)   to a person, being a consultant to or officer employed by the Government, who is approved by the Minister to receive such information;

   (c)   for the purpose of any legal proceedings;

   (d)   for the purpose of preparing official statistics or publications; or

   (e)   for any purpose which may be prescribed.

   (2) Where an area has been but is no longer subject to a licence, nothing in subsection (1) shall, except where the Minister otherwise directs, operate to prevent the disclosure by or on behalf of the Government of any geological information or matter concerning that area.

   (3) Any person who contravenes any provision of subsection (1) shall be guilty of an offence and liable on conviction to a fine not exceeding P1000 or to imprisonment for a term not exceeding two years, or to both.

   (4) Where proceedings are instituted for an offence under this section, it shall be a sufficient defence where the accused person proves that the information disclosed was, prior to the disclosure, generally known.

7.   Public officer not to acquire or hold certain rights

   (1) No public officer shall, directly or indirectly, acquire any right or interest in any licence, and any document or transaction purporting to confer any right or interest on any such officer shall be null and void.

   (2) No public officer employed in the Ministry shall acquire or retain any share in a private company carrying on exploration or development operations in Botswana:

   Provided that the Minister may authorize a departure from the provisions of this subsection where, in his opinion, the operations in Botswana of the company concerned form a negligible part of the total operations of that company.

   (3) Any person who contravenes any provision of subsection (2) shall be guilty of an offence and liable on conviction to a fine not exceeding P500 or to imprisonment for a term not exceeding 12 months, or to both.

8.   Indemnity of officers

   No public officer or other authorized officer shall be liable for any thing done or omitted to be done bona fide in the performance or purported performance of any function vested in or delegated to him by or under this Act.

9.   Retention of cores and samples

   (1) No core or sample obtained in the course of the exercise of powers conferred by a licence shall be destroyed or otherwise disposed of except for the purposes of identification or analysis without the permission in writing of the Minister, who may grant such permission subject to such conditions as he may deem fit to impose.

   (2) Where any core or sample is retained for the purpose of complying with subsection (1), there shall be maintained a record in such degree of particularity as the Minister may require sufficient for the identification of the core or sample and the location and geological horizon of its origin.

   (3) Any person who destroys or disposes of a core or sample in contravention of subsection (1) or fails to maintain a record as required by subsection (2) shall be guilty of an offence.

10.   Preference for Botswana products, etc.

   (1) The holder of every licence shall, in the conduct of his operations under such licence, and in the purchase, construction and installation of facilities, give preference to the maximum extent possible consistent with safety, efficiency and economy, to-

   (a)   materials and products made in Botswana; and

   (b)   service agencies located in Botswana and owned by Botswana citizens or bodies corporate established under the Companies Act.

   (2) The holder of a licence shall, in all phases of his operations, give preference in employment to citizens of Botswana to the maximum extent possible consistent with safety, efficiency and economy.

   (3) The holder of a licence shall, in his operations, conduct training programmes in consultation with the Minister for the benefit of employees so that such employees may qualify for advancement.

PART III
Licences
(ss 11-68)

General (ss 11-16)

11.   Restrictions on persons to whom licence may be granted

   No licence shall be granted to or held by-

   (a)   an individual who-

      (i)   is under the age of 21 years;

      (ii)   is not a citizen of Botswana or has not been ordinarily resident in Botswana for a period of four years or such other period as may be prescribed;

      (iii)   is or becomes an undischarged bankrupt, having been adjudged or otherwise declared bankrupt, whether under the laws of Botswana or elsewhere; or

      (iv)   has been convicted, within the previous 10 years, of any offence of which dishonesty is an element, or of any offence under this Act, the Employment Act or any similar written law in force outside Botswana, and has been sentenced to imprisonment without the option of a fine or to a fine exceeding P300 or the equivalent thereof;

   (b)   a company-

      (i)   which has not established a domicilium citandi et executandi in Botswana;

      (ii)   unless, in the case of a development licence, such company is incorporated under the Companies Act; or

      (iii)   which is in liquidation except where such liquidation is part of a scheme for the reconstruction or amalgamation of such company.

12.   Agreement with respect to grant, etc. of licences

   The Minister may enter into an agreement with any person in respect of any or all of the following matters-

   (a)   the grant of a licence;

   (b)   the conditions to be included in a licence; or

   (c)   any matter incidental to or connected with the grant of a licence.

13.   Applications to be made to Minister

   An application under this Act-

   (a)   shall be made to the Minister in such form as may be approved by the Minister or prescribed; and

   (b)   may be withdrawn by the applicant giving to the Minister in writing a notice of withdrawal.

14.   Powers of Minister to obtain information

   (1) The Minister may, by notice in writing served on an applicant for the grant of a licence, require the applicant to furnish in writing, within such reasonable time as is specified in the notice-

   (a)   such further information in connection with the application as the Minister may reasonably require; or

   (b)   where the applicant is a company, such information as the Minister may reasonably require to enable him to ascertain to what extent the controlling power (whether directly or indirectly) relating to the affairs of the company may be vested in a company incorporated outside Botswana or in an individual resident outside Botswana.

   (2) To enable him to dispose of an application for the grant of a licence the Minister may cause such investigations, negotiations or consultations to be made or carried out as he considers necessary.

15.   Form of licence

   A licence shall be in such form as may be approved by the Minister or prescribed.

16.   Reservation of blocks

   (1) The Minister may, by order published in the Gazette, declare that a block specified in the order (not being a block in respect of which a licence is in force) shall not be the subject of a licence.

   (2) While a declaration in respect of a block under subsection (1) remains in force, a licence shall not be granted in respect of that block.

   (3) The Minister may, by order published in the Gazette, vary or revoke any declaration published under this section.

Exploration Licences (ss 17-27)

17.   Application for exploration licence

   (1) A person may make an application for the grant of an exploration licence in respect of any block.

   (2) The Minister, may by notice published in the Gazette, invite applications for the grant of an exploration licence in respect of any block, specifying therein the period during which applications may be made.

   (3) An application for a licence under this section shall be made in writing and shall contain the following particulars-

   (a)   the full name and nationality of the applicant, or, in the case of a partnership or other association of persons, the full names and nationalities of all partners or of all such persons, or, in the case of a body corporate, the registered name of such body, the full names and nationalities of the directors and the full name and nationality of any shareholder who is the beneficial owner of more than five per cent of the issued capital;

   (b)   full information as to the applicant's financial status, technical competence and experience;

   (c)   a description of the area constituted by the blocks in respect of which the application is being made;

   (d)   proposals with respect to the employment and training of Botswana citizens;

   (e)   a proposed programme of exploration operations and the estimated cost thereof; and

   (f)   any other matter which the applicant may wish the Minister to consider.

   (4) An area described in an application under this section shall be constituted by blocks which-

   (a)   form a single area; and

   (b)   are such that each block in that area has a side in common with at least one other block in that area.

18.   Disposal of application for exploration licence

   (1) Subject to the provisions of this Act, on application duly made the Minister may grant, on such conditions as he may determine, or refuse to grant an exploration licence in respect of any block.

   (2) An exploration licence shall not be granted in respect of a block which is, at the time the application for a licence is made-

   (a)   comprised in a licence already granted; or

   (b)   reserved by declaration under section 16.

19.   Notification of grant or rejection

   (1) The Minister shall cause the applicant to be notified in writing of his decision on the application and, where the grant of an exploration licence is approved, such notification shall include the terms and conditions on which it is granted.

   (2) Where the applicant-

   (a)   notifies the Minister, in writing, within 60 days of the date of notification or within such further period as the Minister may allow, that he accepts the terms and conditions to be attached to the exploration licence, the Minister shall cause the exploration licence to be issued; or

   (b)   fails to notify the Minister in accordance with the provisions of paragraph (a), the application shall lapse.

20.   Form and content of exploration licence

   (1) An exploration licence shall be in such form as the Minister may determine and shall-

   (a)   include the terms and conditions on which it is granted;

   (b)   include a description and place of the exploration area; and

   (c)   state the period for which it is granted.

   (2) There shall be appended to an exploration licence a programme of exploration operations.

   (3) There may be included in an exploration licence a condition requiring the applicant to agree to the Government or a person nominated on its behalf, on such terms as may be agreed, acquiring or having an interest in any venture to explore for or recover petroleum which may be carried out in any block in the licensed area.

21.   Rights conferred by exploration licence

   (1) Subject to the provisions of this Act and to the conditions specified in the licence, an exploration licence shall confer on the holder thereof exclusive rights to explore for petroleum in the exploration area and to carry on such operations and execute such work as shall be necessary for that purpose.

   (2) Where, in the course of exercising his rights under an exploration licence, the holder of the licence discovers any other mineral, he shall, within 30 days immediately following such discovery, notify the Minister thereof in writing.

22.   Term of exploration licence

   (1) Subject to the provisions of this Act and to the conditions specified in the licence, an exploration licence shall remain in force-

   (a)   for a period not exceeding four years;

   (b)   where the licence is renewed under section 25, for such period as may be specified in an appl

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