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OIL EXPLOITATION LICENSE IN CAMEROON

Oil exploitation license in Cameroon also known as the petroleum exploitation license is granted for operations intended to extract hydrocarbons for commercial purposes, in particular, development and production operations as well as ancillary activities such as the abandonment of hydrocarbon wells, deposits, and production of facilities. The operations portray the steps to exploit oil in Cameroon. Oil exploitation license in Cameroon is subject to state approval through the respective regulatory agencies. The steps to exploit oil in Cameroon are governed by the petroleum code of 2019. According to the petroleum code, the oil exploitation license in Cameroon is granted to operators in the upstream petroleum exploitation sector of Cameroon. The MM sets up the areas for which the oil exploitation license in Cameroon. Steps to exploit oil in Cameroon consists of prospection, discovery and exploitation of Natural gas, associated natural gas, liquefied petroleum gas, dry gas, hydrocarbons, liquefied hydrocarbons, crude oil for the upstream petroleum sector activities, and conveyance by pipeline, etc. The grant of the license to exploit petrol in Cameroon is very complicated as the state usually has an interest in every petroleum exploitation project it awards to successful applicants.

LICENSE TO EXPLOIT PETROL IN CAMEROON (SCOPE)

However, a right to prospection is granted subject to the determination by the state of Cameroon in collaboration with the relevant public institutions or bodies in charge of the oil exploitation license in Cameroon, for which petroleum exploitation contracts may be concluded.

Law No. 2019/008 of 25th April 2019 instituting the petroleum code regulates the steps to exploit petrol in Cameroon and the scope of the oil exploitation license in Cameroon. Specific provisions governing the petroleum exploitation license in Cameroon and production imbedded in Petroleum contracts implement the principle of Extractive Industries Transparency Initiative and Exchange Control Regulations.

OIL EXPLOITATION AREAS IN CAMEROON

The petroleum code describes petroleum exploitation license areas in Cameroon as blocks. Nine blocks are allocated by the state as oil exploitation areas in Cameroon.

STEPS TO EXPLOIT OIL IN CAMEROON

The steps to exploit oil in Cameroon are based on the various authorization to be obtained in view to exploit petrol. With the nine blocks which have been tagged as oil exploitation areas in Cameroon, the following authorizations are issued;

  • Non-exclusive prospecting authorization,
  • An Exclusive exploration authorisations,
  • Exclusive interim production authorization,
  • An Exclusive production authorization,
  • Domestic Transportation authorization etc.

CONTRACTS TO SECURE AUTHORIZATION

The contracts which secure the oil exploitation license in Cameroon include;

  • Concession contract
  • Product Sharing contract
  • Service contract

The steps to obtain the petroleum exploitation license in Cameroon consist of;

  1. Geographical Coordinates of the contractual area,
  2. Accounting procedure,
  3. Participation agreement, and
  4. Letter of guaranty.

CONTRACTS IN CAMEROON

Petroleum Contracts are all negotiated with the MM, are subject to Cameroonian law and contain all dispositions applicable to the relevant exploration and/or production phase, including:

  1. Exploration area;
  2. Duration of the contract and the relevant authorizations or permits including renewal periods and relinquished areas;
  3. Work and investment commitments and relevant securities;
  4. Transportation rights;
  5. Production ownership and sharing;
  6. State participation;
  7. Tax and customs regime;
  8. Transfer and assignment etc.

FISCAL OBLIGATIONS IN OIL EXPLOITATION IN CAMEROON

The grant of authorization under petroleum contracts is also subject to several fiscal obligations to wit:

  1. Bonuses,
  2. Payment of Fixed entry fees,
  3. Surface area royalty,
  4. Proportional royalty,
  5. Additional petroleum tax,
  6. Profit oil and cost oil,
  7. Corporate income tax etc.

Concession contracts through exploration permit upon signature by decree. The date of signature implies the date of entry into force of the Concession Contract.

As regards petroleum exploitation in Cameroon production sharing contracts and service contracts, successful negotiation will lead to immediate signature and entry into force unless otherwise agreed.

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