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Exploration and production
Who holds the rights to oil and gas reserves in your jurisdiction?
Minerals in Belgian subsoil are generally owned by the landowner of the surface area above – except in specific cases concerning hydrocarbons and mining activities. Exploration for and the exploitation of oil and gas are conducted on the basis of a licence or concession. The applicable regime depends on the area concerned, as the regions and federal state have their own legislation.
The Flemish Regional Act of May 8 2009 on deep subsoil states that all hydrocarbons – including oil and natural gas – which are naturally present in deep subsoil (ie, at least 100 metres deep) are the property of the Flemish region. When hydrocarbons are extracted under an extraction licence, ownership is transferred to the licence holder subject to a payment to the Flemish region. Landowners are required by law to allow licence holders to conduct exploration and exploitation activities on their land. However, they are entitled to compensation for any damages that they may suffer and for the loss of enjoyment of their rights.
The Walloon Regional Act of July 4 2002 on quarries stipulates that quarries can be exploited only by holders of an environmental permit. In the absence of an agreement with the landowner regarding the exploitation of the area in question, the Walloon government may, in certain cases, grant to any company which so requests the necessary exploitation rights, regardless of whether the landowner agrees. The Walloon government, the provinces, the municipalities and public bodies can, in some cases, also expropriate and acquire land in the public interest where it is necessary for the purpose of quarry exploitation.
The Brussels-Capital region has no specific legislation regarding oil and gas exploration and extraction. Therefore, the Royal Decree of April 7 1953 on the regulation form and manner of investigations of applications for obtaining an exclusive licence to explore or extract petroleum and flammable gasses – which was repealed for the Flemish and Walloon regions – still applies. All licence applications must be directed to the competent minister for the mining industry.
Under the Act of June 13 1969 on the exploration and exploitation of non-living resources located in territorial waters and on the continental shelf, a concession must be obtained before offshore exploration and exploitation activities can be undertaken. The relevant procedure is set out in the Royal Decree of September 1 2004 on this matter. Further, a specific licence is required for the offshore exploration and exploitation of hydrocarbons on the basis of the Royal Decree of October 30 1997 on the granting of exclusive licenses for the exploration and exploitation of hydrocarbons on the continental shelf and in territorial waters.
Is there a distinction between surface and subsurface rights?
As a general rule, land ownership in Belgium encompasses both surface and sub-surface rights. However, it is possible to achieve horizontal ownership unbundling both above and under the ground, through building rights for a maximum of 50 years.
What rules and procedures govern the grant of rights for exploration and production purposes (eg, through licences, leases, concessions, service contracts, production sharing agreements)?
The federal state and the regions have their own specific legal regime in place for granting exploration and exploitation licences.
In the Flemish region, a separate licence from the government is required for the exploration and exploitation of oil and gas. An exploitation licence can be obtained only on the basis of the results achieved under an exploration licence.
The relevant procedures are set out in the Decision of the Flemish Government of July 15 2011 on the implementation of the Flemish Regional Act of May 8 2009 concerning deep subsoil, which reviews the formalities that should be fulfilled and the information and documents to be provided. The extraction of hydrocarbons is based on an extraction plan which also requires approval from the Flemish government.
In the Walloon region, the applicable rules and procedures can be found in the Walloon Regional Act of July 4 2002 on quarries and the Walloon Regional Act of March 11 1999 on environmental permits, which cover the relationship with landowners and the required environmental permit, respectively.
In the Brussels-Capital region, the Brussels-Capital Regional Act of June 5 1997 concerning environmental permits designates installations for the extraction of oil or natural gas, oil and gas storage facilities and crude oil refineries as Class IA establishments, which require a preliminary environmental impact assessment.
What criteria are considered in awarding exploration and production rights (eg, are there any restrictions on the participation of foreign investors/companies)?
In the Flemish region, such criteria are listed in the Flemish Regional Act of May 8 2009 concerning deep subsoil and include:
- the applicant’s technical and financial capabilities;
- the environmental impact of the envisaged activities;
- the potential lack of efficiency and sense of responsibility shown by the applicant in the context of a previous licence; and
- the possible interference with other licensed subsoil activities, where appropriate.
Licences must or can be refused for a number of reasons. For example, a licence must be refused when a similar licence has already been granted for the area to which the licence application applies. A licence can also be refused if the Flemish government deems it necessary for national security reasons – for example, when:
- a state from outside the European Economic Area or one of its citizens has de facto control of the applicant; or
- it is unlikely that the exploration or exploitation of hydrocarbons in the area in question is economically or technically feasible.
The Walloon Regional Act of July 4 2002 on quarries and the Royal Decree of April 7 1953 stipulate no specific criteria for awarding exploration and production rights for the Walloon or Brussels-Capital regions.
The Royal Decree of September 1 2004 sets out the procedure for awarding offshore exploration and production rights. However, it contains no substantive criteria for assessing applications.
Are there any special legal provisions applicable to joint ventures?
No specific legal provisions apply to joint ventures regarding oil and gas exploration and production.
Can exploration and production rights be transferred to third parties?
Licences granted on the basis of the Flemish Regional Act of May 8 2009 concerning deep subsoil can be transferred to third parties subject to prior written approval from the Flemish government.
For licences granted on the basis of the Walloon Regional Act of March 11 1999 on environmental permits, when an installation is (partially) operated by a party other than the environmental permit holder, that party must make a joint notification to the competent authority together with the original environmental permit holder. The transferee must confirm in writing that it will:
- comply with the existing permit’s conditions; and
- accept any additional conditions.
As regards the Brussels-Capital region, the Royal Decree of April 7 1953 states that the (partial) transfer of a licence is subject to the same procedure and requirements as the original licence application
Is hydraulic fracturing (‘fracking’) permitted in your jurisdiction?
No specific legislation has been adopted regarding hydraulic fracturing in Belgium. However, in 2014 the Flemish government adopted a moratorium on the exploration and production of hydrocarbons (eg, shale gas) using hydro-fracturing, as it considered that it did not have enough technical and scientific expertise on the subject. Regulation is expected in the future.
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