HomeFeatured NewsOil: What future for the now invalid concessions?

Oil: What future for the now invalid concessions?

The ARP’s Industry, Commerce, Natural Resources, Energy and Environment Committee approved, in plenary session on January 25, 2024, the special agreement and its annexes relating to the hydrocarbon exploitation concession known as the “Sidi Kilani” exploitation concession, the convention particulière and its annexes relating to the hydrocarbon exploitation concession known as the “Ashtart” exploitation concession, and the convention particulière and its annexes relating to the hydrocarbon exploitation concession known as the “Rahmoura” exploitation concession, for which an urgent examination has been requested.

Number of concessions has fallen drastically

Representatives from the Ministry of Industry, Energy and Mines gave a presentation on the hydrocarbons sector and the approved route for continuing to operate concessions after the end of their period of validity. They pointed out that the number of valid permits has fallen from 52 concessions in 2010 to just 16 at present, which has led to a reduction in the number of exploration wells and therefore to lower production, compared with the recording of a recovery during the year 2021. They pointed out that this was due to the Nawara and Menzil fields coming on stream.

The Sidi Kilani field, discovered in 1989 and brought on stream in 1991, was also discussed. It has a daily production capacity of around 930 barrels of oil, while the size of the remaining reserves is estimated at around 2 million barrels. Representatives of the Ministry of Industry, Energy and Mines have indicated that the period of validity of the concession has expired in 2022 and that Société tunisienne des activités pétrolières (ETAP) will continue to operate the Sidi Kilani franchise at 100%.

“Rahmoura” will continue

On the other hand, they explained that the “Rahmoura” field contains a productive well with a daily average of around 380 barrels of crude oil. They also pointed out that the exploitation concession is part of a group of concessions that included eighteen, all of which expired between December 2018 and December 2023, which then required the adoption of a unified action plan to determine its fate and deal with the situation thus created.

They explained that, on this basis, the Ministry had adopted an option that would allow it to continue to operate after the end of its validity due to its profitability. They considered that the same applied to the hydrocarbon exploitation concession known as “Ashtart”, which has an average daily production of around 4,700 barrels of oil.

Why have foreign companies left?

During the debate, a number of MPs questioned the wording of the contracts concluded between the Republic of Tunisia and international oil exploration companies, the conditions that had to be met before the contracts were signed and the extent to which they complied with the rules on transparency and the independence of the sovereign national decision-making process.

Others wondered why so many companies had left the country and refused to renew their operating contracts, and asked about the government’s strategy to attract foreign investors to research and exploration, especially as this requires financial investment and major technical and logistical preparations. They called for the use of Tunisian expertise. A number of MPs asked for details of the quantities that Tunisia benefits from in terms of total national production and exports.

The legal and legislative difficulties facing the sector were also raised. A number of other MPs raised the issue of real estate, the situation of abandoned oil wells and the dangers they pose to the local population, as well as the lack of social responsibility in supporting the state’s operational efforts and its contribution to cultural and sporting development.

Tunisian oil supply covers only 50% of consumption

The representatives of the Ministry of Industry, Energy and Mines, in response to the questions and concerns raised, pointed out that national consumption is around 10 million oil equivalents per year, while the volume of supply amounts to 50% of the consumption rate. This requires the development of internal oil resources in terms of exploration and drilling in order to meet the various national needs. They explained that the State’s strategy is based on developing local production, investing in renewable energies and developing technical alternatives to reduce energy consumption.

With regard to the revision of the Hydrocarbons Code, they stated that coordination is underway between the legislative departments of the Ministry of Industry, Mines and Energy, in consultation with the Prime Ministry and all the parties concerned, and that the project will be ready once it has gone through all the necessary stages and procedures.


Please enter your comment!
Please enter your name here

- Advertisement -