PETROLEUM MINING ACT 1966

LAWS OF MALAYSIA REPRINT Act 95 PETROLEUM MINING ACT 1966 Incorporating all amendments up to 1 January 2006 PUBLISHED BY THE COMMISSIONER OF LAW REVISION, MALAYSIA UNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968 IN COLLABORATION WITH PERCETAKAN NASIONAL MALAYSIA BHD 2006 2 Laws of Malaysia ACT 95 PETROLEUM MINING ACT 1966 First enacted … ... … … … … 1966 (Act No. 58 of 1966) Revised … ... … … … … 1972 (Act 95 w.e.f. 1 November 1972) PREVIOUS REPRINTS First Reprint Second Reprint … … … … … … … … … … 1994 1999 Petroleum Mining 3 LAWS OF MALAYSIA Act 95 PETROLEUM MINING ACT 1966 ARRANGEMENT OF SECTIONS Section 1. Citation and application 2. Interpretation 3. Restriction on petroleum exploring, prospecting and mining 4. Persons by whom application may be made 5. Manner in which application may be made 6. Lapse of approval 7. Exploration licence 8. Petroleum agreement 9. Single petroleum agreement for contiguous areas 10. Grant of more than one exploration licence or petroleum agreement 11. Notification of any execution, surrender, etc., of a petroleum agreement 12. Regulations 13. Repeal and saving 14. Permission to enter upon alienated land FIRST SCHEDULE SECOND SCHEDULE 4 Laws of Malaysia ACT 95 Petroleum Mining 5 LAWS OF MALAYSIA Act 95 PETROLEUM MINING ACT 1966 An Act to make provision with regard to mining for petroleum and for matters connected therewith. [Peninsular Malaysia—1 December 1966; Sabah and Sarawak—8 November 1969, P.U. (A) 467/1969] Citation and application 1. (1) This Act may be cited as the Petroleum Mining Act 1966. (2) This Act shall apply throughout Malaysia but in its application to Sabah and Sarawak it shall have effect only with respect to offshore land. Interpretation 2. In this Act, unless the context otherwise requires— “continental shelf” has the meaning assigned to it by section 2 of the Continental Shelf Act 1966 [Act 83]; “exploration licence” means a licence issued under section 7; “exploration work” means any work carried out in connection with exploration for petroleum; “foreshore” means all that land lying between the shore line and the low-water mark of ordinary spring tides; “land”, in relation to the States in Peninsular Malaysia, means any area of on-shore land and includes off-shore land adjacent to and contiguous with the on-shore land and, in relation to the States of Sabah and Sarawak, means the area of off-shore land only; 6 Laws of Malaysia ACT 95 “licensee” means the person to whom an exploration licence is issued and includes his successors in title and the persons deriving title under him; “off-shore land” means the area of the continental shelf; “on-shore land” includes the foreshores and submarine areas beneath the territorial waters of the States; “petroleum” includes any mineral oil or relative hydrocarbon and natural gas existing in its natural condition in strata but does not include coal or bituminous shales or other stratified deposits from which oil can be extracted by destructive distillation; “petroleum agreement” means an agreement entered into under sections 8 and 9; “Petroleum Authority” has the meaning assigned to it by subsection 4(3); “prescribed” means prescribed by regulations made under section 12. Restriction on petroleum exploring, prospecting and mining 3. (1) No person shall explore, prospect or mine for, or do any act with a view to exploring, prospecting or mining for, petroleum upon any land except by virtue of an exploration licence or a petroleum agreement. (2) Any person who acts in contravention of this section or of any of the conditions of an exploration licence or a petroleum agreement issued to, or entered into, by him shall be guilty of an offence and shall, on conviction, be liable to a fine not exceeding twenty thousand ringgit or to imprisonment for a term not exceeding two years or to both; and all machinery, tools, plant, buildings and other property together with any minerals or other products which may be found upon or proved to have been obtained from the land so unlawfully explored, prospected or mined shall be liable to forfeiture. Persons by whom application may be made 4. (1) Any person desirous of exploring, prospecting or mining for petroleum may apply in accordance with this Act for an exploration licence or a petroleum agreement in respect of any area of land. Petroleum Mining 7 (2) Every application for an exploration licence or for a petroleum agreement shall be considered and approved or refused, as the case may be, by the Petroleum Authority. (3) The Petroleum Authority shall— (a) in relation to an application in respect of an area of on-shore land, be the Ruler or the Yang di-Pertua Negeri of the State in which the area of on-shore land is situated; and (b) in relation to an application in respect of an area of off-shore land, be the Yang di-Pertuan Agong. Manner in which application may be made 5. (1) Every application for an exploration licence or for a petroleum agreement shall be made in writing in the form set out in the First Schedule and shall be addressed to the Menteri Besar or the Chief Minister of the State or, to the Minister for consideration by the Petroleum Authority. (2) Every application shall be accompanied by such fees as may be prescribed. (3) Every application shall be accompanied by two copies of a survey office map showing delineated thereon the boundaries of the area of the land in respect of which an exploration licence or petroleum agreement, as the case may be, is applied for; and in the case of an application for an exploration licence, the application shall be supported by evidence that the applicant intends to carry out exploration work in good faith. (4) The applicant shall upon request by the Menteri Besar, the Chief Minister or, as the case may be, the Minister, furnish such evidence as the Petroleum Authority may consider necessary as to his financial position and technical qualifications and as to his ability to comply with any terms and conditions of the exploration licence or, as the case may be, the petroleum agreement; and if such evidence shall not have been furnished within three months of the request thereof, the application shall, unless the Petroleum Authority otherwise determines, be deemed to have been withdrawn. (5) All information comprised in, or furnished to the Petroleum Authority in pursuance of, an application made under this Act shall be treated as confidential. 8 Laws of Malaysia ACT 95 (6) Where any person requires an exploration licence or a petroleum agreement in respect of two or more separate areas, a separate application shall be made in respect of each such area. Lapse of approval 6. If a petroleum agreement is not executed within six months following the date of the approval of the application therefor, the right of the applicant to an agreement shall, unless the Petroleum Authority considers that the delay is not attributable to the fault of the applicant, be deemed to have lapsed. Exploration licence 7. (1) The Petroleum Authority may issue an exploration licence in respect of the whole or any part of the area of the land applied for, and every exploration licence issued under this Act may authorize the licensee thereof to explore for petroleum over the whole or any part of the area of the land specified in that licence: Provided that— (i) an exploration licence shall not be issued in respect of an area of land which has already been covered by a petroleum agreement entered into under section 8; and (ii) nothing in this section shall prevent the Petroleum Authority from issuing in respect of the same area of land more than one exploration licence or another exploration licence or licences to other person or persons. (2) Every licensee shall enjoy rights and liberty granted under his licence during the continuance thereof in common with other licensees to whom exploration licences in respect of the same area may have been issued or may thereafter be issued. (3) Every exploration licence shall be for an initial period of two years and thereafter may be extended from time to time upon an application for the extension thereof made and supported by evidence that the licensee has in fact carried out during the currency of the licence exploration work upon a reasonable scale. (4) The licensee may at any time apply to the Petroleum Authority for a petroleum agreement in respect of the whole or any part of the area held under his exploration licence; and upon the issue of a petroleum agreement covering the area or any part thereof all Petroleum Mining 9 exploration licences covering that area or any part thereof shall determine without the Petroleum Authority being liable to pay any compensation to licensees. (5) An exploration licence shall be in the form set out in the Second Schedule: Provided that the Petroleum Authority may make such modifications and exclusions and may add such additional clauses covering ancillary matters as the Petroleum Authority may deem fit. Petroleum agreement 8. (1) Upon an application made in that behalf by any person desirous of exploring, prospecting or mining for petroleum the Petroleum Authority may, subject to subsection (2) and section 9, enter into a petroleum agreement with that person in respect of any area of land included in the application. (2) Save as provided in section 9, every petroleum agreement shall cover an area of land not exceeding 4,000 square miles, and shall be in the form and shall contain the terms and conditions of the model petroleum agreement under paragraph 12(1)(i): Provided that the Petroleum Authority may make such modifications and exclusions and may add such additional clauses covering ancillary matters in respect of any particular petroleum agreement as to the Petroleum Authority may seem fit. Single petroleum agreement for contiguous areas 9. (1) Notwithstanding subsection 8(2) and subject to subsection (2), the Petroleum Authority may enter into a single petroleum agreement in respect of two or more contiguous areas of land although the total area covered by the agreement exceeds 4,000 square miles. (2) Where the total area covered by a single petroleum agreement entered into in respect of two or more contiguous areas exceeds 4,000 square miles, the obligations with respect to expenditure commitments and fixed yearly payments under the agreement shall be increased proportionately in the proportion that the excess area bears to the area of 4,000 square miles. 10 Laws of Malaysia ACT 95 (3) For the purpose of this section, “contiguous areas” means areas which are situated on the same geological structure or cover a group of geologically similar and related structures. Grant of more than one exploration licence or petroleum agreement 10. Nothing in this Act shall prevent more than one exploration licence or petroleum agreement being issued to, or being entered into with, or being in existence at the same time in favour of, the same person. Notification of any execution, surrender, etc., of a petroleum agreement 11. The Petroleum Authority shall, as soon as may be after the execution, surrender, determination or assignment of any petroleum agreement or the right thereunder under this Act, publish a notification in the Gazette of the fact stating the name of the person with whom the petroleum agreement was made, the name of any assignee and the situation of the area concerned. Regulations 12. (1) The Yang di-Pertuan Agong may make regulations generally for the purposes of carrying into effect this Act, and in particular the regulations may provide for— (i) the form and contents of the model petroleum agreement; (ii) the appointment, duties, privileges and powers of officers to enforce this Act including an exploration licence and any petroleum agreement issued or entered into thereunder; (iii) the fees to be paid in respect of anything to be done under t