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How to explore in Morocco

- HYDROCARBON LAW SUMMARY -

Exploration for and exploitation of hydrocarbons in Morocco are governed by law Nr 21-90 enacted on April 15, 1992 as amended by law 27-99 enacted on March 16, 2000.

The main provision of the law are summarised as follows:

1- Reconnaissance licence : For exploration. Works include seismic acquisition. Duration of one year extensible.

2-Petroleum agreement : To be concluded with the State prior to obtaining :

  • Exploration permit of 8 years duration extensible for 2 years. Works include exploration and appraisal wells. Permit surface not less than 200 Sq Km and not greather than than 2.000 Sq Km with total rights by a holder up to 10.000 Sq Km onshore and 20.000 Sq Km offshore.
  • Exploitation concession granted for commercially exploitable deposit for a duration of 25 years with a possible extension of 10 years. Works include development, production and commercialization activities.

Government interest share is 25 % maximum.

3-Fiscal terms :

  • Corporate tax :Total exemption from corporate income tax for a consecutive ten years period, starting from the date of regular production of each exploitation concession.
  • Surtax : None
  • All equipment, materials, products and services necessary for reconnaissance, exploration and exploitation operations are customs duties and VAT free.
  • the holders of exploitation concession are exempted from business activity tax, urban tax other than municipal tax and tax on non developped urban areas
  • The profits and dividends of the holders of an explotation concession and shareholders of concessionary companies are exempted from the tax on income from shares, capital rights and similar revenues and are freely transferable outside Morocco without limitaion for foreign entities.

   Are fixed in the implementing Decree :

  • Royalty : the rates are as follows:
    • Onshore and offshore less than 200 meters water depth:   Oil 10%    Gas 5%.
      The first 300.000 Tons of oil and 300 millions m3 of gas produced from each exploitation concession are exempted.
    • Offsore beyond 200 meters water depth :
      Oil   7%   Gas   3,5%.
      The first 500.000 Tons of oil and 500 millions m3 of gas produced from each exploitation concession are exempted.
  • Surface rentals :
    • Exploration permit: For each exploration permit a fee of 1000 Dirhams is payable at time of filling a request or applying for an extension period.
    • Exploitation concession : For each exploitation concession an annual rental of 1000 dirhams per Sq Km is payable each year.

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