Legal

Petroleum exploration, development and production in Seychelles are governed by the Petroleum Mining Act of 1976. The Act was designed to create a favourable legal environment for investment in petroleum exploration by international oil companies. The Act vests the right of petroleum deposits within the Jurisdiction of Seychelles in the State. The Act permits the Government to grant a non-exclusive licence to companies to carry out petroleum exploration operations or enter into a petroleum agreement with oil companies giving them the exclusive right to undertake exploration, development and production operations within the area covered by the Agreement.

Exploration License

Exploration License is non-exclusive and companies can only explore in the area covered by the License. A company may apply for more than one license to cover acreages in different areas of Seychelles. The terms and conditions of an exploration license are subject to negotiations with the interested company. The license has a term of two years and may be renewed for further periods as may be agreed between the parties.

Petroleum Agreement

The Act permits the Government to enter into a Petroleum Agreement with an oil company under which the company may be granted exclusive rights to explore for, develop and produce petroleum within the jurisdiction of Seychelles. The terms and conditions to be included in any petroleum Agreement are the subject of negotiations between the Government and the oil company. The Government’s thinking during such negotiation is reflected in the Model Petroleum Agreement in existence during the time. The legislative scheme allows Government to set out the terms and conditions which it would wish to see govern petroleum exploration, development and production in a model Petroleum Agreement.

The legal status of this document is that of a negotiating instrument and so it does not serve legally to limit in any way Government’s ability to undertake meaningful negotiations.