In a significant development in Tunisia's oil sector, Exxoil SA has been granted authorization by the Ministry of Industry, Mines, and Energy to become the sole operator of the El Menzah oil concession. This move follows a regularization procedure initiated in January 2024, aimed at rectifying a situation that has been pending since 2001. The concession, located within the Grombalia hydrocarbon research permit, was initially established in November 2000 for a duration of thirty years.
The El Menzah concession was discovered in 1998 and produced approximately 1.87 million barrels of oil before operations ceased in 2007. The original concession agreement was made under the Grombalia hydrocarbon research permit, approved by law in 1991. Following the discovery, a request for the concession was submitted on May 30, 2000, and approved by the Consultative Commission for Hydrocarbons on July 27, 2000. An arrêté on November 18, 2000, officially established the concession.
The decision to grant Exxoil SA the sole concession rights comes after several administrative steps, including approval from the Tunisian Enterprise for Petroleum Activities (ETAP), expressed in a letter dated September 3, 2024, and a favorable opinion from the Consultative Commission for Hydrocarbons on September 27, 2024. These steps paved the way for Exxoil's request to assume full rights and obligations previously held by ETAP and Ecumed Petroleum Grombalia Limited.
The history of the El Menzah concession is marked by complexities, particularly regarding participation and development. In 2001, ETAP decided not to participate in the concession's development, following an economic study that concluded the venture was not viable. This decision, notified on February 9, 2001, led to a misalignment between the legal distribution of participations and the actual contribution of parties to petroleum operations.
Exxoil SA's involvement in the concession dates back to its sole operation and financing of development and production activities until the field's shutdown in 2007. The regularization process gained momentum after the announcement of the bankruptcy of Akoumad Petroleum Grombalia Limited, a participant in the concession, in June 2021. On January 18, 2024, Exxoil submitted a request to regularize the concession's legal status, seeking to modify the 2000 ministerial arrêté and assume full concession rights.
The favorable opinion from the Consultative Commission for Hydrocarbons and ETAP's confirmation of Exxoil's role in the concession's operations were crucial in facilitating the transfer of rights. The Commission's 139th session on September 27, 2024, endorsed Exxoil's request, leading to the Ministry's authorization for Exxoil SA to become the sole operator of the El Menzah concession.
The changes in the El Menzah concession reflect broader efforts to revitalize and clarify the legal and operational framework of hydrocarbon activities in Tunisia. With Exxoil SA now at the helm, there are expectations for potential future developments in the concession. The transfer of rights aims to align the operational reality with legal standings, providing a clearer path for future operations and investments in the sector.
Key points
- Exxoil SA takes over as sole operator of the El Menzah oil concession.
- The regularization process addresses a situation pending since 2001.
- The concession's history involves complexities regarding participation and development.
