WHAT YOU SHOULD KNOW ABOUT OIL POLICY IN COTE D'IVOIRE



In the last decade oil operations have grown significantly in Cote d’Ivoire, becoming the second exportation resource of the country. From less than 10.000 bbl/day in 90’s the production amounted up to 50.000 bbl/ day in 2006. The Government current plan is to reach the level of 300.000 bbl/day by 2020.

1. Ownership of Oil substances

The Oil code provides that all minerals, and all geothermal deposits in the soil or subsoil, territorial waters, exclusive economic zone and continental shelf of the Republic of Côte d'Ivoire are properties of the State.

The Government can recourse to prospective investors for the exploration and exploitation purposes. To this end, the government enters into Oil contracts and issues Oil permits.

2. Oil Contracts

The oil contracts deal with the perimeter, the duration, the condition of   the renewal and extension of the oil permits.

2.1. The Government can enter into three types of oil contract with the investors: concession, Production Sharing Agreement, a services agreement.

Offshore operations in Cote d'Ivoire

(i) Concession

Under a concession the holder of the contract assumes at its own risk  the financing of operationsThe State receives royalties of fixed sums that are calculated according to the amount of oil that is produced, irrespective of the oil selling price. Moreover, the oil companies use the oil as they see fit: they can set the production levels as they wish.

(ii) Production Sharing Agreement

Under this contract the oil that is extracted is shared between the producing State and the operating company. The company is first repaid in oil for the exploration and production costs (this is called “cost oil”). The surplus of the production (called profit oil) is shared between the government and the holder of the contract in accordance with the terms and conditions set forth in the contract.

 (iii) A risk services agreement.

This contract provides for the reimbursement of oil costs to the extractive company and remuneration of the exploitation services in cash.

2.2. The transfer or assignment by the holder of contract of its rights to a third party is subject to     a government approval

3. Oil Titles:ÉcouterLire phonétiquement

The government has the discretionary power to grant the oil titles to the prospective resource extraction company. 

(i)  Legal requirement

An oil title can be granted to the entities which meet the following requirements:

- A local company;

- To a group of local and foreign companies  which entered into a joint venture agreement in order to  carry  out oil activities;

- To a foreign company on the condition that it has set up a branch or a business locally which me be considered a permanent establishment.

(ii)  Oil Permit regime

Type of Permits	Exploration Permit	Exploitation Permit
Grantor:	Government – Ministry of Energy and Mining Decree of The President[1]	Government – Ministry of Energy and Mining Decree of The President[2]
Duration	3 years	Cannot exceed  25 years
Renewability	The renewal is possible. The renewal period including the initial period cannot exceed 7 years, or 9 years in case of search in deep marine zone.	The renewal is possible for a period which cannot exceed 10 years and on the conditions provided by the oil contract.
extension	The extension, is possible under the terms and conditions set forth in the oil contract, especially in case of discovery of oil deposit in deep marine zone	No
Transferability	The transfer is possible  but  subject to the approval of the government	The transfer is possible  but  subject to the approval of the government

E. B

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[1] The Direction des Hydrocarbures  of  the Ministry of mining and Energy is the governmental body which has the duty to study and process any application of an oil title. The Minister on the basis of the study and processing of the above mentioned body will propose the signing of the Decree creating the permit by the head of State.