New Hydrocarbon Act passes through Polish Parliament

Polish emblem on a notepad
Source: DollarPhotoClub

The Upper House of the Polish Parliament has adopted the amendments to the Hydrocarbon Act – Polish sources report. The Act now only awaits the signature of the President.

In total, seventeen amendments to the Hydrocarbon Act have been introduced. The new rules will come into force on the 1st of January 2015.

The most important changes, from the investors’ point of view, is the mitigation of proceedings against companies infringing work schedules. Under the new law, the Licensing Authority would summon the investor to explain and rectify the delays within a certain period of time. If the company ignores the summons the Licensing Authority will take steps to revoke the concession.

Other changes aim to clarify the rules governing the tendering process. If a tender is won by several companies who have submitted a joint bid, a separate agreement will be signed by each of the companies in question.

Senators also introduced a requirement that each entity applying for an exploration licence demonstrates experience in the diagnosis and documentation of at least one hydrocarbon deposit, or shows a track record of carrying out exploration work for at least three years.

The Parliament also introduced a single concession for reconnaissance, exploration, and production. It will be awarded through a tender held by the Minister of the Environment. The concessions will be granted for a period of no less than ten and no more than thirty years.

Exploration in one part of the concession will be allowed to commence before the work is completed on another part.

The acquired rights of the existing licensees will be upheld.

The requirement for two separate documentations regarding geology and investment will be replaced with one, joint, documentation covering both areas.

Environmental procedures have been postponed to the last phase before extraction. Geophysical surveys will be conducted on the basis of an application, without the need to apply for a full licence.

The Act introduces a requirement to provide security for, among others, non-performance or improper performance of the conditions specified in the license. The amendment strengthens the supervisory powers of control of the mining and environmental inspection. It also provides for monitoring, by the Minister of the Environment, of the operation of the concessions.

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