The Law on Research and Exploitation of Hydrocarbons of twenty-seven of June of a thousand nine hundred and seventy-four brought important innovations with respect to the previous Law of one thousand nine hundred and fifty-eight, with the aim of to accommodate the legal text to the reality of a field in which there have been so many changes, not only economic, but also technological, in recent decades.

This Regulation develops the aforementioned Law of twenty-seventh of June of a thousand nine hundred and seventy-four following the innovative line marked by this one.

On the one hand, administrative simplification has been sought. To this end, the processing of the files is lightened. Approvals have been reduced to a generally lower decision-making level and many performances gain automatic approval. Permission transmission has also been streamlined.

Concepts such as the international geographical coordinates referred to the Greenwich meridian (instead of Madrid) are updated, in accordance with the resolutions adopted in recent years for all cartography. national.

The mention of the gold peseta disappears and new values of minimum investments are set, more in line with the costs of oil research.

Finally, another novelty can be cited in the regulation of the regulation. The criterion for the inclusion in a single text of the provisions of the Law with the Regulation's own has been adopted in order to simplify the consultations. From here the Articles of the Law have been reproduced with their same numbering, replacing in these the mention "the present Law" by the "law and this Regulation" although the references, now unnecessary, to zone B and zone C, sub-zone d (Sahara and its continental shelf).

In its virtue in compliance with the provisions of the Second Final Disposition of the Law on the Investigation and Exploitation of Hydrocarbons of twenty-seven of June of a thousand nine hundred and seventy-four, and in accordance with the opinion of the Council of State, on the proposal of the Minister of Industry and after deliberation of the Council of Ministers at its meeting of the thirtieth of July of a thousand nine hundred and seventy-six,

DISPONGO:

Single item.

The Regulation for the application of the Law on the Investigation and Exploitation of Hydrocarbons of twenty-seven of June of a thousand nine hundred and seventy-four is approved.

Given in La Coruña to thirty July of a thousand nine hundred and seventy-six.

JOHN CARLOS

The Minister of Industry,

CARLOS PÉREZ DE BRICIO OLARIAGA

REGULATION FOR THE IMPLEMENTATION OF THE LAW ON RESEARCH AND EXPLOITATION OF HYDROCARBONS OF 27 June 1974

CHAPTER FIRST

General provisions

Article 1. º

1.1. This Regulation aims at the development of Law 21/1974 of 27 June establishing the legal system for the exploration, research and exploitation of deposits, of liquid and gaseous hydrocarbons, as well as of activities for the transport, storage, purification and refining of the hydrocarbons obtained, when they are carried out by the researchers themselves or by operators using installations annexed to the production plants.

1.2. For the purposes of the Law and this Regulation, liquid or gaseous hydrocarbons shall be understood to mean any concentration or natural mixture of hydrocarbons in such physical states, including substances of any other nature than with them. find in combination, suspension, mixing or dissolution.

1.3. Natural solid hydrocarbon deposits, such as asphalt rocks, natural waxes, sands, shales or bituminous slates and any other similar rocks, will continue to be governed by mining legislation.

2.1. Existing deposits in the national territory and in the subsoil of the territorial sea and of the seabed that are subject, for the purposes of its exploration, research and exploitation, are inalienable and imprinted in the Nation. national sovereignty, in accordance with the Spanish laws and international conventions in force ratified by Spain. Such deposits are public domain assets, the exploration, research and exploitation of which may directly assume the State or yield in the form and conditions that the laws establish.

Article 2. º

1.1. The geographical scope of application of the Law and this Regulation is divided into the following areas:

Area A. Peninsular and island territory and Spanish territories of North Africa.

Area C. Subsoil of the territorial sea and of the other seabed that is subdivided into the following sub-areas:

a) Mediterranean coasts.

(b) Atlantic coasts, except sub-area c.

c) Canary Islands.

1.2. Exceptionally, islands which do not have the surface area sufficient to be granted as a land permit may, for the purposes of this Regulation, be included in the relevant marine permits of zone C, or granted in whole or in part to underwater areas adjacent to its coasts.

Item 3.

1. The holders of the authorizations, permits and concessions referred to in the Law and this Regulation shall enjoy for the performance of the activities in which they are regulated, the benefit of forced expropriation or temporary occupation of the goods. and rights requiring the location of the tasks, facilities and services necessary for the exercise of its activity, as well as of the right of way in cases where it is necessary, for all types of access routes of transport lines and distribution of energy and water and gas pipelines.

2. To this end, the public utility is declared to be of public interest in the investigation, exploitation, transportation, storage, purification and refining of natural hydrocarbons, as well as its facilities and services.

3. The granting of permits for exploration, research permits, operating concessions and authorizations for transport, storage, purification and refining activities shall be implied by the declaration of public utility. The approval of the respective projects and plans referred to in paragraphs 1. 3. Article 23 and Article 30 (3) shall also imply the declaration of the need for occupation of the land provided that the specific and individual relationship referred to in Article 17 of the Compulsory Expropriation Act is formulated and describing, in all aspects, material and legal, the goods or rights that it considers necessary for expropriation.

4. In the event of an extension of the authorisations, permits or concessions, the right to temporary occupation of the land necessary for the work and services shall be automatically extended, without prejudice to the new compensation which may be granted. correspond to the longest duration of the occupation.

5. The occupation shall be agreed by the relevant Provincial Delegation of the Ministry of Industry.

Article 4. º

1. The State may, in itself, carry out the activities referred to in Article 1, which shall be exercised, in each case subject to the provisions of the Law and this Regulation, by the body and in the form and conditions agreed upon by the Government, by Decree on a proposal from the Ministry of Industry.

2. The Government, on a proposal from the Ministry of Industry, will establish the national program of exploration, research and exploitation of hydrocarbons, to which the state action will be adjusted in terms of the exploitation of the resources that are the subject of the Law. This programme shall be appropriate to the forecasts of the national development plans.

3. The performance of any of the activities referred to in the Law by public or private legal persons shall be carried out by granting authorizations, permits or concessions in the form and with the conditions laid down in the Law and in this Regulation.

(a) The exploration may be carried out by natural or legal persons, Spanish or foreign, under the conditions laid down in Articles 12 and 13 of this Regulation, prior to the authorisations referred to therein.

(b) The investigation requires the granting of the corresponding permit and may be the holders of the permit referred to in Article 6 of this Regulation.

(c) The holding shall be carried out by concession, except where the State assumes the activity.

(d) The remaining transport, storage, purification and refining activities of the products obtained may be carried out in advance of the appropriate authorisations.

4. For the purposes of the preceding paragraph, the processing of files falling within the scope of the Law and this Regulation shall be carried out by the Directorate-General for Energy, which shall have the appropriate administrative unit to that end.

Article 5.

1. The holder of a research permit may investigate the area under the conditions laid down in the Law and in this Regulation and take advantage of the hydrocarbons discovered in accordance with Article 15.

2. The concession of exploitation confers on its holder the right to carry out the exploitation of the deposits of hydrocarbons discovered in the area of the concession and to continue the investigation of the area that it maintains in force, both in the concession as in the part which it may subsist as a permit, as well as to obtain authorizations for the activities of storage, transport, purification and refining of the products obtained, having to grant such authorizations and to carry out operations in the form and conditions provided for in the Act and this Regulation.

3.1 Research permits and operating concessions may only be granted, individually or in shared ownership, to public legal persons or public limited liability companies which, in addition to fulfilling the conditions under which the they are established in Article 6; they demonstrate, in the administration's judgment, their technical and financial solvency to carry out the investigation and, where appropriate, the exploitation of the requested areas.

3.2 In the case of shared ownership, the technical and economic solvency shall be related to the unit of the unit-holders, without being required individually.

4. The granting of the authorization of exploration, of the permit of investigation and of the concession of exploitation, as well as the authorization by the Ministry of Industry of the installations that are carried out under the Law, will be understood without prejudice to the authorisations or concessions which the holder must obtain from other departments or public entities depending on where the corresponding activity is to be carried out.

Article 6.

1. In addition to public legal persons, they may be holders of research permits, operating concessions and authorizations for storage, transport, purification and refining, the Spanish public limited companies in whose social object it is including the performance of these activities.

2. Foreign natural or legal persons may take part in such operations by constituting an anonymous Spanish company or by participating in an existing, analogous commercial nature, which includes those in its social object.

3.1. Subject to the authorization of the Council of Ministers, foreign anonymous companies whose social object comprises the activities referred to in Article 1 (1) may be the sole holders of research permits and operating disposals. establishment of a branch in Spain.

3.2. Such branches may also obtain authorizations for the purification, storage and transport of the hydrocarbons produced in the area granted.

3.3. In the event that the company has submitted its application under the branch formula, it must prove its registration in the Commercial Registry, or have it in the process, in accordance with the provisions of Article 21 of the Commercial Code and in the Articles 84 and 88 of the Regulation of the Trade Register, subsequently forwarding the supporting documents in the form detailed in Article 23 of this Regulation.

4. By way of derogation, the Government may, where it considers that there are reasons of public interest so advised, grant research permits to Spanish public limited companies whose social object does not provide for this activity, provided that they do not proceed to the corresponding modification of its Social Statutes, within six months of the granting.

Item 7.

1.1. For the purposes of the Law, foreign natural and legal persons shall enjoy the freedom of capital investment. The investment must be made through the contribution of foreign exchange or machinery, equipment and technical assistance which are necessary for the development of its activity, when it cannot be obtained in Spain under technical and economic conditions. satisfactory, appreciated as such by the Ministry of Industry.

1.2. In addition to the cash contributions, consideration shall be given to contributions in foreign currency which, after a global or individual authorization from the Directorate-General for Energy, are made directly by natural or legal persons abroad. foreign persons in favour of the holders defined in Article 6 of the Law.

1.3. As regards the valuation of machinery and equipment, the maximum shall be allowed to be fixed for the purposes of the payment of tariff duties.

1.4. Investment by technical assistance will require the prior authorisation of the Directorate-General for Energy.

1.5. In any case, the value of these contributions may be reviewed by the Ministry of Industry, taking into account the costs of origin, the state of the equipment and other circumstances.

2.1. Capital investments may also be made, in whole or in part, by weighing up pesetas from profits or capital that have the status of transferable to the outside or convertible, in accordance with current legislation.

2.2. Foreign natural and legal persons who participate in Spanish companies or who carry out the activities provided for in the Law by establishing a branch in Spain will be applicable to them, as not provided for in the provisions of the Specific rules on foreign investment in Spain are set out in the provisions.

3. If approved by the Ministry of Industry, the import of technology, the total number of non-Spanish employees in each authorized company, shall not exceed 20 per 100.

4.1. In undertakings whose activity is governed by the law and this Regulation, the number of foreign nationals who are entitled to foreign nationality, fixed or temporary, must always be lower than that of nationals with similar functions.

4.2. For these purposes, it shall be considered national technicians who have obtained their qualifications in Spain and the foreign nationals who are recognised as such by validation.

5. On equal terms and characteristics for the recruitment of services, they will have preference, Spanish contractors and for the use of machinery and equipment manufactured in Spain.

Article 8. º

1. They may not be the holders of, or participate in, the majority of the permits and concessions referred to in the Law, directly or indirectly, by natural or legal persons, States or foreign governments or companies or entities which are financially dependent on them when they are in any way able to exercise control over them. The companies financed by the International Finance Corporation are exempted.

2. However, the Council of Ministers, acting on a proposal from the Ministry of Industry and with a report from the Foreign Affairs and Finance Ministers, may exceptionally amend the said limitation.

3. Non-Spanish companies or entities in which States or foreign governments have participation will only be able to carry out the activities referred to in the Law by constituting an anonymous Spanish company, or by participating in an existing, analogous mercantile nature, including those in its social object.

Article 9. º

1. In Spanish limited companies with foreign participation, the number of non-Spanish members may not exceed the proportion of foreign capital.

2. If these companies are managed by one or more managers or managers, and some of them are foreign, their powers must be joint and non-solidary, without the number of the non-Spaniards being able to exceed either of the proportional to the share of foreign capital. The President of the Board of Directors and the Chief Executive Officer shall be Spanish. If there is only one administrator or manager, you must also have Spanish nationality.

Article 10.

1. Permits and concessions may be transmitted, subject to the authorization of the Ministry of Industry, in favor of those who meet and satisfy the conditions and requirements required by the Law and this Regulation, to be the holders of the same.

2. They shall also require such authorisation, the agreements between companies involved in the products obtained or the benefit derived from the holding, whatever the legal form of the agreement.

3. There shall be no effect between the parties or third parties, the legal business to which this Article refers, carried out without the authorization required by it.

4.1. In the case of transmission to one or more companies, it shall be presented in the relevant Register referred to in Article 70 of this Regulation, the draft contract for which the approval is requested to be signed by all the holders and the acquirers. The non-holders of the permit or concession, if not the holders of others in force, shall demonstrate that they meet the requirements set out in Chapter I of the Law, or those that are enforceable if the technical or economic competence is contributed by the other partners.

4.2. Within 60 days, the Directorate-General for Energy shall propose to the Minister for Industry the resolution to be taken.

5.1. Where the transfer is made between the holders of the permit or concession, the holder or the remaining co-holders, they must prove that they retain the technical and economic competence and that they fulfil the conditions of legal capacity to (a) the provisions of Article 8 (1) and (3) do not apply to the limitations referred to in Article 19.

5.2. In the event that the holder or co-holders subsist accredit the fulfilment of the conditions referred to in the preceding paragraph, the Directorate General of Energy shall propose within thirty days to the Minister of Industry the granting of the authorization.

6. Granted the authorization, the contract project will become final.

7.1. In cases of shared ownership of permits and concessions, the joint holders may establish or the Administration to require, contracts or collaboration agreements regulating their relations and activities, which must be approved by the Directorate-General for Energy.

7.2. If such clauses were to be included in such contracts, which could lead to changes in the participation of the holders, the resolution of the Directorate shall not imply, produced the fact, the effectiveness of such transmissions, which are shall be subject, in any case, to the approval provided for in the preceding paragraphs.

8. When simply transmitting actions, without changes in the ownership of permits or concessions, express approval will not be required, but society must at all times be able to credit, under the warning of nullability, that the the technical and economic capacity that corresponds to it and that the transaction does not infringe any of the limitations contained in Articles 8 and 19.

Article 11.

1.1. The holders of exploration authorizations, research permits and operating concessions shall be obliged to provide to the Ministry of Industry, the information requested by them, with respect to the characteristics of the field and to the works, productions and investments they make, and the geological and geophysical reports concerning their authorizations, permits and concessions, as well as the other data that this Regulation determines, all without prejudice to the Article 6. of the Law of Mines.

1.2. The Directorate-General for Energy, at all times, may request data on the progress and results of ongoing investigations and carry out any checks it deems appropriate.

1.3. The holders of permits and concessions shall, in duplicate, send the following documents and data:

a) Job plans. Within three months of the date of the validity of the research permit, the plan of work to be carried out within the first year of validity will be presented. The presentation of the work plans for the remaining years of validity shall be carried out thirty days in advance of the date of initiation of the corresponding year of validity. For the execution of the tasks, and in equal circumstances, due preference should be given to the Spanish contractors, services, materials and equipment. All work plans, which must be accompanied by the corresponding detailed budget for implementation, shall be signed by the optional Director and endorsed by the Professional College concerned, in the event that the College to which you belong.

b) Monthly report: Before the 15th day of each month, with the statistical data of the activities carried out in the permit or concession in the preceding month relating to geology, geophysics, drilling and production.

(c) Quarterly statement of investments: Regardless of the economic results, for years of validity, as referred to in paragraph (d), each operator shall forward in the month following each calendar quarter its estimate of investments in the preceding quarter, broken down by permits.

d) Annual report: Within three months of the anniversary of the validity of each concession and each permit-or group of permits or concessions adjacent to the identity of the holders ' participation, effective and obligations-, the holder shall submit a report of the works executed, in the preceding year of validity, with due justification of the investments made in accordance with the conditions of the grant. With the exception of permits and concessions of 100 per 100 head of the State, these investments must be certified by an entity of auditors or sworn auditors, without prejudice to the faculty that at all times has the Directorate-General for Energy to carry out any inspections it deems necessary.

e) Survey Implementation Report: One month before its start. It will include the data on its location, coordinates, objective, expected depth, team to use and budget.

f) Weekly report: During the drilling phase, in which it will be specified: Date of the last day of the report; depth in meters on that date; days since the beginning of the survey; probable geological floor; incidences detachable (entubations, diagrafias, witnesses, indicia, production tests), scheduled for next week (drilling, casing, cementiations); date of abandonment in their case.

g) Exceptional Incidents. They shall be communicated by telephone, telegraph, or telex, to the competent unit. The execution of any production test shall be notified as soon as possible. Without prejudice to any assistance to the test of an official of the Directorate-General for Energy, any occurrence of hydrocarbons shall be notified by the quickest means, and confirmed in writing within forty-eight hours.

h) The survey end report. Within two months from its conclusion: Ficha-summary of the survey; a Memory with the complete collection of the data obtained; its geological, paleontological results, description of the column crossed, oil results, tests of production, mechanical parameters, and abandonment measures. It will also include, at the normal scales in the industry, the main graph of the survey with its geological, lithological and mechanical representation and the collection of diagrafias made.

i) Geological and geophysical reports. To the waiver or expiry of the permit, in the manner prescribed in Article 73 (1.2).

1.4. In accordance with the provisions of Article 6 of the Mining Act, the holder shall provide the Geological and Mining Institute of Spain, if requested, with the data relating to all its surveys of more than 25 meters on land, or any depth in the submerged areas. This data is subject to the confidentiality referred to in paragraph 2 of this Article.

2.1. Geological, geophysical, economic and survey results shall be considered strictly confidential and shall not be communicated to third parties without the express authorisation of the holder, during the period of the investigation or of the concession of exploitation.

2.2. They shall not be regarded as confidential: the particulars of other mineral substances which have been revealed during the operations of the holder and of the importance of which he must account; the general information on the characteristics of the research carried out; survey and work situation maps; statistical data on activities; overall volume of investments; summary sheets of the surveys including the roofs of the formations crossed; produced outputs; exports, and other data the disclosure of which is approved by the Directorate-General for Energy.

2.3. Immediately following the completion of the process of data and the interpretation where appropriate, of the work carried out under the authorizations of exploration in free areas, the whole of the Energy Directorate will have to be delivered to the Directorate General of Energy information obtained. After one year from the date of completion of the field work, the corresponding documentation will lose its character as confidential.

2.4. Information from permits and concessions whose ownership, for whatever reason, is not maintained, will remain in the custody of the Directorate-General of Energy who may authorize its examination and even its publication or eventual reproduction.

CHAPTER II

From Scan and Research

Article 12.

1.1. No administrative authorisation shall be required for land surface exploration of a purely geological nature, which may be carried out freely throughout the national territory.

1.2. The aforementioned exploration comprises the geological methods of the field and the cabinet, understanding as such the field surveys, sampling, photogeological work and, in general, everything that involves a study of the surface of the soil, its structural constitution, mineralogy and paleontology.

2.1. The Ministry of Industry, on a reasoned request indicating the technical criteria for the exploration and where reasons of public interest do not advise otherwise, may authorise in free areas exploration work of geophysical or other character that does not involve the execution of deep perforations.

2.2. They will require authorization from the Ministry of Industry, therefore, all geophysical or geochemical methods of prospecting, as well as the execution of other aerial, marine and terrestrial work or sommery surveys, understanding as such those of 300 meters.

2.3. Any natural or legal person meeting the requirements referred to in paragraph 3. (a) of Article 4. of this Regulation, may request from the Directorate-General for Energy exploration authorizations for hydrocarbons, in order to effect the recognition and study of certain areas or to carry out certain work, which allow you to select areas of greatest interest to request research permissions.

2.4. These authorizations do not give their priority to the request for research permits, although the execution of the work will be valued among the criteria for granting permits in the area. In the event that the holder of the exploration authorization subsequently obtained research permits in the same areas, the investment made for the works covered by the authorization shall be computable for the purposes of his minimum investment obligations.

2.5. For the above purposes, the request shall consist of the following documents:

(a) Instance addressed to the Director-General of the Energy in which it shall be stated: Name and surname or social reason of the applicant, and address. When acting on behalf of another natural or legal person, the provisions of Article 24 of the Law on Administrative Procedure shall be provided.

(b) For zone A, plane of situation of the works at scale 1:50,000, expressing the provinces and municipal terms affected by the application. For zone C, plane at scale 1:100,000.

c) Program of exploration, with indication of the techniques to use, means available for its development and detail of the operations to be carried out on the surface of the field, kilometers of profiles, number of stations, investment budget, programme of its financing and time limit for its implementation.

2.5. Applications, with the documents referred to in paragraphs (a), (b) and (c), shall be submitted, in triplicate, accompanied by so many copies as the provinces concerned by the area of the authorization requested. One of the original copies will be returned to the data subject, with the stamp and date of the entry.

Article 13.

1.1. Such authorisations shall be granted without prejudice to the permits or concessions that the holder has to obtain from other departments or public entities, for the place where the exploration is to be carried out.

1.2. In the case of privately owned land, permission must be obtained from the owner of the land. If this is denied, the holder of an exploration authorization in free areas, may promote to the Provincial Delegation of the Ministry of Industry concerned, the temporary occupation of the land, in accordance with the provisions of the Law of Forced Expropriation.

1.3. The recognition of the land for obtaining data, analyses and tests which are required for the application of techniques of any kind shall not substantially alter the configuration of the terrain, limiting, both in extension as in depth, as strictly necessary for these purposes. The areas of permit for research or concessions for the exploitation of hydrocarbons in force shall not be invaded unless they are expressly authorised by the holders.

2. The priority for the processing of scan authorizations, which will comprise common areas, will be determined by the order of submission of the applications.

3.1. The Directorate-General for Energy shall, if appropriate, request a report from other Departments and provide a resolution to be notified to the interested parties and to the Provincial Delegations concerned, together with a copy of the holder's application.

3.2. The authorisation shall specify the specific measures to be taken by the petitioner and the conditions under which the examination is granted. It will be noted that in no case will these explorations be allowed on an exclusive basis or create rights and that it will automatically expire in those areas that were subject to the granting of research permits.

3.3. The holders of exploration authorizations are required to submit, to the completion of the works, copies of the reports, maps, and sections and other data related to the authorized operations. The relevant data shall be confidential within one year from the date of completion of the field work.

Article 14.

1.1. The research permits, which will be granted discretionally by the Administration, confer the exclusive right to investigate certain areas for a period of six years in zone A. This period may be extended, at the request of the interested, for a period of three years, thus reducing the original area by 25 per 100.

1.2. The grant shall be at risk and shall be made by the person concerned and shall entail all the rights and obligations arising from the Law itself, this Regulation and the special conditions of the grant.

1.3. The holder wishing to obtain the first extension shall request it from the Ministry of Industry, by application lodged in the Register referred to in Article 70 of this Regulation, at least three months before the date of its expiry.

1.4. To the above described request, accompany the following documentation:

(a) Delimitation of the area, the extension of which is requested, taking into account the reductions mentioned in this article. The surface that the petitioner wishes to retain will be constituted by the juxtaposition of one-minute, one-minute geographic grids that form a continuous block and have at least one common side.

b) A level of 1:50,000 in which the permit and the part whose extension is requested shall be included.

(c) Statistics and accounting analyses of the work carried out in the manner described in Article 73 (2

.

(d) A plan of research work, signed by the optional director of the permit, to be carried out during the three years of the extension, plan to provide for minimum investments per hectare and year specified in the paragraph 1.2 of Article 28.

1.5. The Directorate-General for Energy within 60 days from the date on which it receives the full documentation of the request, will raise its proposal to the Minister for Industry for a resolution by ministerial order, which will be published in the "Official State Gazette" if it is favourable to the grant.

1.6. The decision may be refused only if the holder has failed, in the case of the Administration, in whole or in part, for the essential obligations entered in the Decree granting the permit, in accordance with the provisions of the Article 28 (1) of this Regulation.

1.7. If the decision is favourable to the granting of the extension, the extension shall begin to be counted from the day following the expiration of the preceding period, or the date of its publication in the "Official State Gazette", if it is later.

2.1. In justified cases, a second extension may be granted for another two years, following a favourable agreement by the Council of Ministers. In the case of granting this second extension in zone A, the area of the permit shall be reduced again by 25 per 100 from the original permit.

2.2. The submission of the application with its corresponding documentation as well as the processing thereof shall be carried out in accordance with the provisions of paragraph 1 above, and in accordance with the provisions of this Article. The resolution will be by ministerial order, with the agreement of the Council of Ministers.

3.1. The research permits for zone C confer the exclusive right to investigate certain areas for eight years, divided into the following form: a first period of two years, with a reduction of 30 per 100 from the original surface to the term of the second year, and a second period of six years.

3.2 The holder who wishes to continue the investigation after the first two-year period referred to in the preceding paragraph shall communicate it to the Directorate-General for Energy, presenting the corresponding document, less than forty-five days before maturity. This document shall be accompanied by:

(a) A plane at scale 1:100,000 of the permit in which, clearly, the part to be retained will be pointed out, with the evaluation of its area, which will be constituted by the juxtaposition of geographical quadrilaterals of one minute and they form an area with no continuity solution and have at least one common side.

b) A report of the research carried out in the first period, with the quantification of the effort made in kilometers of profile, number of stations, samples obtained and other data corresponding to all the studies and jobs done.

c) Copy on reproducible support of the geophysical profiles performed in the renounced area and their position maps. A normal copy of the geophysical horizons of the renounced area and the information of any other work performed.

d) Computation of investments made in the biennium.

(e) Work and investment programme for the next six-year period, as provided for in Article 28 (1), as provided for in Article 28

1).

3.3. The Directorate-General for Energy shall, within 45 days, carry out the necessary checks and accept the proposals for the reduction and maintenance of the remainder of the permit in the event of the conditions of the granting and the obligations referred to in Article 28 (1) of this Regulation.

3.4. The Directorate-General for Energy shall at all times keep data on the situation of the free areas at the disposal of the data subjects.

3.5. The second six-year period in zone C may be extended, at the request of the person concerned, for a period of three years, then a second reduction of 20 per 100 from the original area of the permit.

3.6. The holder who wishes to obtain this first extension of three years, shall follow the procedure provided for in Article 14 (1) of this Regulation, with the exception of: 1) the time limit for the submission of the application shall be at least three months before the expiration of its term; (2) the area shall be, again reduced, at least 20 per 100 from the original area of the permit, irrespective of the areas which it would have or voluntarily reduced with (3) that the scale of the plane to accompany the application must be 1:100,000.

4.1. Exceptionally, if, at the end of the second extension in the case of zone A, and the first extension, in zone C, without having discovered oil or gas under conditions which may be estimated to be commercial, in the case of the administration, they would have been If the other characteristics of the investigation could be considered favourable for the finding of hydrocarbons on a proposal from the Ministry of Industry, and after favourable agreement of the Council of Ministers, access, at the request of the interested party, to a new and definitive extension of up to three years, without reduction of the area.

4.2. The areas which are reduced from the area of a permit on the occasion of the extension will revert to the State. If, within six months of its reversal, the State does not decide to assume its own investigation or to contest it, it shall be considered as free and registrable.

5. The extensions, which shall be requested from the Ministry of Industry, shall be granted only where the holder has complied with the provisions of the Law and this Regulation for its implementation. The minimum amount per hectare of the investments to be made by the successful recipients of the permits up to the date of their extinction or the waiver of the permits shall be the one corresponding to the requirements of paragraph 1 of the Article 28.

6.1. In the case of concessions for extensions referred to in this Article, the holder shall, within thirty days of the publication in the "Official State Gazette" of the respective Ministerial Order:

(a) A proof of having entered the Treasury, by the concept of special resources, the amount of 12.5 pesetas per hectare carried over.

(b) Safeguard proof of having entered the General Deposit Box, new guarantees to replace the existing ones adjusted to the areas carried over to 25 pesetas per hectare.

6.2. In the case of a reduction of at least 30 per 100 of the area referred to in Article 14 (3), corresponding to the first period of zone C, there has been no entry into the Treasury in respect of special resources of the quantity covered by the This paragraph shall not be replaced by the replacement of the security for the reduced area, which shall be effected at the time of obtaining the first extension, with a further reduction of 20 per 100 surface area. In this case, the income to the Treasury corresponding to the subsidiary area, which will not exceed 50 per 100 of the original, and the correlative substitution of the guarantees, would be made.

6.3. Within ten days and after the appropriate checks have been made by the Director-General of Energy, he shall agree to the return of the original guarantees.

Article 15.

1.1. The holder of a research permit, which shall discover hydrocarbons, may use them to the extent required by the operations of the research and in any of the areas which have been or are awarded to it, monthly, of the quantities used for such purposes, indicating the destination of such purposes.

1.2. As regards the unused part, the provisions of Articles 58 and 59 of this Regulation shall apply.

Article 16.

1. The surface of the research permissions, will have the following limits:

In zone A: minimum of 10,000 hectares and maximum of 40,000 hectares.

In zone C: minimum of 10,000 hectares and maximum of 100,000 hectares.

2.1. The area of permits in areas A and C shall be demarcated by geographical coordinates, as referred to in Article 23 of this Regulation, by admission to each permit of investigation deviations up to 8 per 100 of the maximum limits established. The total area of the permits awarded shall never exceed the maximum areas referred to in Article 19.

2.2. For the purposes of this paragraph, the permits shall be delimited by two meridians and two geographical parallels or, where appropriate, by the lines corresponding to borders, coasts or the outline of adjacent permits.

3.1. For the purposes of the Law, the area of areas A and C shall be considered to be divided by a geographical grid consisting of distant parallel meridians and parallel five minutes of latitude and longitude, precisely in line with those whose number of minutes are multiple of five. The length will be that corresponding to the Greenwich meridian for all areas.

3.2. Geodetic effect is adopted the datum of the European Network of 1950 (R. E. 1950), Hayford's international ellipsoid of 1924 and the Universal Transverse projection of Mercator (U. T. M.).

3.3 Without prejudice to the provisions of Article 23 (1.2) of this Regulation and in accordance with the provisions of Article 23 of this Regulation, the polygon shall be the subject of partial resignations of research permits or applications for operating concessions. retained or requested, may be constituted by the grouping of one-minute-side geographical quadrillaters that form a continuous area and have at least one common side.

Article 17.

1.1. The granting of a research permit. confers on the holder the right to obtain operating concessions on the area he applies for, with the following limitations: In zones A and C, a number of concessions greater than that resulting from increased in a unit the integer quotient of dividing by 10,000 the area in hectares of the permit.

1.2. For the purposes of the calculation referred to in this paragraph, the area in hectares to be considered is the initial permit, prior to any reductions which may have had to be taken for carry-overs.

2. In no case shall the total extent of the operating concessions on a permit exceed 50 per 100 of the initial area of the permit, except as provided for in Article 34.

3. The granting of exploitation may be requested at any time within the period of validity of the permit to be investigated by the holder of the permit, justifying the existence of hydrocarbons in quantities which permit their exploitation.

Article 18.

1.1. In the case of the results of one or more surveys, the existence of a discovery, the Directorate-General for Energy, shall obtain from the holder all information relating to the finding and shall promote consultations and studies. required.

1.2. If the nature of the data so requires, the Ministry of Industry may request the necessary advice to assess the evidence, giving the holder prior notice, and without this meaning the confidentiality of the data, since in Any case shall be required of the entities consulted due to their reservation.

1.3. The Government may, for reasons of national interest, and on a proposal from the Ministry of Industry, declare the existence of hydrocarbons under conditions which permit their exploitation within the area corresponding to a research permit. by Decree the urgency of the exploitation of the field.

1.4. To this end, the holder shall be required to apply for the granting of the holding, within a period of not less than six months, not exceeding one year, from the entry into force of the Decree laying down the precise limits of the area.

1.5. If it does not do so, the permit shall be extinguished in respect of the part of the area defined by the Administration, which shall indemnify the research expenditure on it.

Article 19.

1. A legal person, directly or indirectly, may not be granted a research permit in the same area or sub-area as defined in Article 2 of the Law, where it is already the holder of:

-In zone A: 50 permissions.

-In each of the sub-areas in which zone C is divided, 30 permits or a surface area of three million hectares, not being able to exceed the area of the permits granted to a society in this zone C the six millions of hectares.

2. The limits laid down in paragraph 1 may be exceeded, in exceptional cases of national interest, by agreement of the Council of Ministers, following a report by the Council of State.

3. The limits indicated will not apply to legal persons with sole or majority participation of the Spanish State, but they will affect, on the other hand, each of the other partners, according to the rules contained in the following paragraphs.

4. In cases of shared ownership, for the computation of the indicated limits, only the percentage of participation of each holder shall be taken into account.

5. For the purposes of the limitations imposed in this article, in the case of the participation of some companies in another that carries out the same activity of hydrocarbon research, the partners will be computed the permits granted to the society are part of the percentage corresponding to the participation of each.

6. For the same purposes, any company, pro rata of the respective participation in its capital, the permits of its members to be holders and those that Ies correspond by the application of the rules contained in the two paragraphs will be computed. above.

7. The same rule shall apply where, by contractual agreement, a company is assigned a stake in the products or profits earned on the other hand, each of the other's permits being allocated to each other in the proportion corresponding to the units that have been set.

8. The areas granted for the holding shall also be computed and the area reductions resulting from the application of Articles 14 and 18 shall be reduced.

9.1. The petitioner is obliged to declare in the application of the research permits all the circumstances affecting him in relation to the limiting conditions provided for in this article. The omission or inaccuracy in the declaration shall result in the cancellation of the permit granted, without any right to compensation. The cancellation will be agreed by Decree on the proposal of the Ministry of Industry, ears its Board of Superior and the interested ones.

9.2. Where the holder of the permit demonstrates that the omission or inaccuracy was motivated by non-malicious ignorance of the facts to be declared, the Ministry of Industry, the interested parties and the Board of Governors of the ministerial department, shall reduce the area of the permit granted to the limits indicated in this article.

10. For the purposes of the above paragraphs, the interest acquired after the granting of the permit in other existing or in-use shall be computed.

Article 20.

1. In the event of two or more requests for research permissions on the same area, the Administration will resolve jointly as causes of preference the following circumstances:

(a) Greater amount of investment and speed of implementation of the investment programme.

b) Availability of equipment and technical and economic guarantees.

(c) the applicant has carried out or is carrying out investigations in other areas of the national territory or abroad, provided that, in the second case, products obtained from the applicant are taken advantage of in Spanish territory or posts at the disposal of the Spanish State.

d) That the applicant undertakes to conduct investigations in other areas of the national territory or abroad, with the condition established, for the second case, in the previous paragraph.

e) Reinvestment in Spain of profits, in the investigation of hydrocarbons or in any industrial activity qualified as preferential interest by the Administration.

f) Offer to the State of participation in the exploitation results.

g) Increased use of Spanish staff.

h) Priority on the date of submission of requests.

i) Participation of Spanish and national capital. Execution through Spanish contractors and service companies. Use of Spanish materials and equipment.

j) Any other condition that assumes an improvement in the offering.

Article 21.

1. Hydrocarbon research permits may be granted even in cases where other mining rights not covered by the Law and this Regulation exist on all or part of the same area.

2. The granting of research permits under the Law and this Regulation shall not prevent the allocation of permits or concessions relating to other mineral deposits and other geological resources on the same areas of authorisations, permits or concessions.

3.1. In principle, priority will be given to the work already carried out, so that the investigation of hydrocarbons in areas where there are mining activities of research or exploitation must be carried out in a way that does not disturb the development of those and, in any case, with the authorisation of the investigator or operator of these mineral resources.

3.2. Reciprocally, before initiating research or exploitation of other mineral or geological resources in the area previously granted for hydrocarbons, the holder of the first shall obtain the corresponding authorization from the holder. of the permit or concession of hydrocarbons, so that the tasks that it is proposed to carry out do not disturb those that carry out the latter.

3.3. Where the holders referred to in the previous paragraph are permits or conceals and do not agree on the possibility of developing their respective activities without interference, before the start of the new work, be (a) the Commission shall, in the event of a failure to act, take the necessary steps to ensure that the activities of the institution concerned are carried out in the first place. This Directorate-General shall promote the dossier as appropriate and make mandatory consultations with the other Directorate-General. If the two Directorates-General for Energy and Mines and Construction Industries agree that a plan of work can be imposed that makes possible the coexistence of both activities, they will raise a report-proposal to the Minister of Industry for approval. Both Directorates-General shall, where appropriate, impose their compliance with the respective parties,

3.4. Where there is no prior agreement between the holders of the overlapping permits or concessions, the Ministry of Industry shall impose a work plan, the oldest holder, if it has a technically justifiable suspicion that the work being carried out In such a plan the other holder may cause irreparable damage to his rights, he may request that the Ministry impose on the most recent holder the obligation to deposit a bond in order to respond to the damages that may occur.

3.5. In any case, the Minister of Industry prior to the report of the Directorates-General for Energy and Mines and Construction Industries, will decide whether or not to impose such a bond.

3.6. In the event that the Minister of Industry resolves, in the face of the allegations of the interested parties or of the Directorates-General, the impossibility of coexistence, of the tasks of both the holders, will decide which one of them is of greatest interest from the point of view of the national economy, and order the suspension of the work of the other, taking into account the performance possibilities of both, to which end it shall obtain a report from the Directorates-General for Energy and the Construction Industries, which in turn will be able to request the advice they judge of other State departments or entities.

3.7. It shall be entitled to compensation, in any event, to the holder of the permit or concession which is obliged to suspend partially or completely its activities.

3.8. To this end, the holders will propose to the Directorates-General for Energy and Mines and Construction Industries, the designation of the Peritos to carry out the appraisal. Approved by the respective Directorates-General the designation, the Perits will proceed to assess the damages; if an agreement is reached between both parties, the assessment will be accepted by which it will initiate the file and will have character of mandatory.

3.9. If the Perios of both parties do not agree on the assessment of the damage, within one month the Directorate-General which promoted the file will designate a third Perito to be an official of the said Body, who will decide on the discrepancy within another thirty days. Against the resolution of this Directorate-General, the Minister of Industry has made an appeal for an appeal.

3.10. The term of validity of the research permits and the exploitation concessions, if any, will be automatically extended for a period equal to that of the processing of these files, counted from the conflict up to the resolution as appropriate,

3.11. If the incompatibility of the work is temporary, the suspended tasks may be resumed after the one has disappeared.

Article 22.

1.1. The person who intends to obtain a hydrocarbon research permit will request it from the Ministry of Industry through an instance that he will present for registration in the Special Register of the Directorate General of Energy.

1.2. The Directorate-General for Energy of the Ministry of Industry will be provided with three registration books for the receipt of documents: a special one intended exclusively for requests for research permits in accordance with the provisions of the Article 22 (1) of the Law, another for the exploitation concessions and, finally, a third general, where the corresponding seats of the rest of the documentation shall be made which shall be derived from the application of this Regulation.

1.3. The special register for the registration of applications for applications for research permits will be a book, and will be noted both in the matrix and in the heel, which will be given as a safeguard to the petitioner, the number corresponding to the application, the date on which the request is lodged, the name of the investigation permit, the name and address of the applicant, the limits, province or provinces in the area where the land is located and the total area of the permit requested, calculated in accordance with the provisions of Articles 16 and 1.2. of Article 23. You will also be returned to the request, if requested, a sealed copy of each of the documents you present.

1.4. The person who submits an application for a research permit has the right to check that the registration immediately preceding his or her application bears the number preceding the entry in the latter.

1.5. Each research permit will be the subject of a separate file, thus requiring a request for each one and without the possibility of gathering several requests in the same instance. The documentation referred to in Article 23 (1) may, however, be common for several applications. The Administration may, where appropriate, accumulate several files in one case where it corresponds to the same ownership, in order to resolve in a single administrative act.

1.6. The name of the requesting entity, as well as its nationality and address and its circumstances in relation to Article 6, shall be entered in the instance in the instance, and the situation and limits of the area covered by the application for investigation in the manner indicated Article 16; the name you wish to give to the permit; for the zone A province or provinces in which it is located and the municipal terms to which the request affects.

1.7. An address of the petitioner in Madrid or that of his legally authorized Spanish agent must also be entered.

1.8. Both applications, which must be signed by a person duly authorized for such act by general or express power of attorney, as well as the supplementary documentation referred to in the Law and in Article 23 of the This Regulation shall be filed in triplicate; and two copies shall remain in the possession of the Administration and the third, duly sealed, shall be returned to the applicant together with the receipt of the registration of the application in the register special.

1.9. Where applications are made on behalf of two or more entities, it shall be recorded in the instance, signed by all the applicants, the proportion with which each of them shall participate in the research permit, if granted, and the participant to represent before the Administration all the others during the processing of the file, presenting the appropriate power of attorney to accredit such representation.

1.10. In the event that the land defined in an application is an operating concession or a permit for research granted, the Administration shall inform the applicant who may draw up a new instance, correcting if possible, limits of the requested area, preserving the primitive request date.

1.11. If it is not possible for the area designated in the new application to meet the conditions laid down in Article 16, the application shall be made as abandoned and the security deposit required in Article 23 (4) shall be returned to the applicant.

1.12. Where the requested area is wholly or partially invaded by one or more of the processing permits, the Administration shall inform the petitioner, who may proceed to rectify his application or wait for a decision to be taken on the records of the permits whose land invades, and in such case, if the invaded permits are granted, the situation of the two sub-sections above will be in place, and if they are not granted, the processing of the permit application will continue.

2. Those who have given up a research permit or who have not applied for the relevant concession for the term of their term of validity or extensions may not apply for new research permits on the whole or on a part of the area concerned, for a period of three years from the date of expiry or termination of the permit, unless it was a public tender.

Article 23.

1. The application for the research permit shall be accompanied by the following documentation:

1. The accrediting of the legal personality, nationality, technical capacity and solvency of the petitioner, as well as of the other requirements that are required in Chapter I, and, where appropriate, the origin of the contributions foreign. Such documents shall take into account the following circumstances.

(a) In the case of foreign legal persons, they must justify their acceptance of any of the forms of financing of the research operations referred to in Article 6 (2) and (3). (a) constituted for the development of such activities, may have in principle any capital, but must state the way in which it will be financed in order to be able to fulfil in full effectiveness the obligations arising from the permits which may are granted or transferred to you.

(b) The foreign petitioner who obtained the research permits shall, within three months, be obliged to transfer to the company incorporated in compliance with Article 6 (2) and (3). are granted, at which time the company must have the precise technical and financial resources for the development of its management, in the administration's view.

c) The created company shall be subrogated to all rights and obligations arising from the permission or permissions granted.

(d) The petitioner shall guarantee to the company by the constituted all its technical and financial support, in accordance with what the law prevents.

e) The economic capacity must be such that it allows the petitioner to efficiently perform the operations that demand the extension of the permit or permits requested in the administration's judgment. To this end, the Directorate-General for Energy may require the applicant to provide additional data or evidence, which may consist of bank institutions, letters of credit and, in general, documents proving their ability to economic,

(f) The technical solvency shall be demonstrated by a history of the petitioner or, if it is a new constitution, by the history of the person providing his or her guarantee and technical support, enunciation of the technical staff who will provide their services, the relationship of the equipment and equipment to be used in the investigation or to be available for use in the areas to which the potential permit or grant may be affected.

2. A plane of the requested surface. The permits shall be limited by two meridians and two parallel, or in their case, by coasts, borders or contours of other border permits. The meridians and parallels will coincide with an exact number of sexagesimal minutes, which will be multiple of 5. The plane will have the following characteristics.

a) For zone A, flat eI will be drawn on a map at scale 1:50,000, referred to Greenwich coordinates. To this end, the leaves of the Geographic and Catastral Institute or the Army's Geographic Service, referred to as meridian, will be used to exist.

b) For zone C, the map shall be presented with contours or bathymetric data at scale no less detailed than 1:100,000. The lengths will refer to the Greenwich meridian.

(c) When the limits of the permit, the coast or the border closest to the area requested are less than five sixtieth minutes, the petitioner shall be authorized to include in his application this area complementary to whatever form, provided that it does not base the limitations of the areas specified in Article 16 of the Law.

d) In the case of having to use maps, or making mention of limits that were referred to the meridian of Madrid, for the purposes of this Regulation and for its conversion in Greenwich coordinates, the difference of length is fixed between both meridians at 3 ° 41 '10' ', 6.

e) For all purposes of the Act and this Regulation, the area of each five-minute five-minute geographical grid shall be considered as follows:

Canary Islands

Between 25th and 26th latitude, 7,738 hectares.

Between 26º and 27º of latitude, 7,673 hectares.

Between 27th and 28th latitude, 7,605 hectares.

Between 28º and 29º of latitude, 7,534 hectares.

Between 29th and 30th latitude, 7,462 hectares.

Between 30th and 31st latitude, 7,367 hectares.

Peninsula and Balearic Islands

Between 35º and 36º of latitude, 6,980 hectares.

Between 36º and 37º of latitude, 6,892 hectares.

Between 37th and 38th latitude, 6,802 hectares.

Between 38th and 39th latitude, 6,710 hectares.

Between 39º and 40º of latitude, 6,615 hectares.

Between 40º and 41st latitude, 6,519 hectares.

Between 41st and 42nd latitude, 6,421 hectares.

Between 42nd and 43rd latitude, 6,321 hectares.

Between 43º and 44th latitude, 6,219 hectares.

Between 44th and 45th latitude, 6,115 hectares.

Between 45º and 46th of latitude, 6,009 hectares.

f) Existing grid fractions to coasts, borders, or other permits, will be computed by half the surface of the entire grid.

3. A research project that will consist of a plan of work, investment and financing related to the period of the permit duration. It will detail the methods of research to be used, and the budget of the work which will in any case satisfy the minimum requirements laid down in Article 28. The characteristics of the project will be as follows:

(a) Ira subscribed by a Mines Engineer or a Bachelor of Geological Sciences. Where the work requires basically the use of geophysical or geochemical techniques, the project may also be subscribed by Licensas in Physical Sciences or Chemical Sciences, respectively, as well as by other university graduates (a) the recognition of the relevant specialisation. In any event, the part of the project that includes operations that may affect the security of the goods or persons or require the use of explosives, shall be signed by graduates of Mines.

(b) Given the confidential nature of the project, your visa may not be required by the appropriate professional college.

4. " Resguardo accredativo de haber, en la Caja General de Depositos en Madrid, en valores o en metallic, a disposition of the Dirección General de la Energía, and as a guarantee of the fulfillment of any kind of obligations imposed by the Law and this Regulation on the holders, the amount of 25 pesetas per hectare requested. This deposit may be replaced by the filing of a bank guarantee of an identical amount or any other of the eligible entitlements, declared fairly by the Administration.

5. º affidavit of the petitioner of the circumstances affecting him in relation to the limiting conditions provided for in article 19 of the Law, indicating the permits of investigation or concessions of exploitation granted or on behalf of persons or entities, and which in their view do not exceed the above conditions.

6. "Improvements" offered in respect of the circumstances established by the Law and this Regulation, as well as any other that would constitute a benefit to the State or an improvement in the effectiveness of the investigation and, ultimately, in the early exploitation of the natural resources referred to in the Law.

7. Of these documents, the entries in the entries 1. to 5. above shall necessarily be accompanied by the application. Paragraph 3. shall be in a closed and sealed envelope. The period referred to in paragraph 6 may be lodged within two months, as laid down in Article 25, also in the case of closed and sealed. The two envelopes shall be opened on the date and conditions laid down in Article 26 of this Regulation.

2. The expenses for the processing of the permit shall be of the petitioner's account.

Article 24.

1.1. The guarantee referred to in Article 23 (1.4) shall be liable to comply with the obligations arising out of the Law, this Regulation and the Decree of Granting including the Prosecutors. In the event that the obligations arising from the grant and pending compliance exceed the amount of the guarantee, the procedure laid down in paragraphs 1.6 to 1.8 of Article 73 of this Regulation shall be followed.

1.2. The Administration may proceed against the guarantee provided to pay for fines and penalties.

2. Within 15 days the security shall be returned to the person concerned, or left without effect, in the event of refusal of the permit. In cases of resignation or termination, the refund shall be made after the holder has satisfied all his obligations in the manner provided for in Article 73 of this Regulation.

3. If the holder is responsible, he shall cease to comply with his obligations and the entire or partial execution of the security provided must be carried out, the person concerned shall replenish that security within one month, otherwise the licence shall be expired.

Article 25.

1. Within thirty days from the date of the filing of the application, it shall be verified whether the petitioner meets the requirements of the Law.

2.1. In the event that the applicant does not meet the above requirements, the General Energy Directorate shall refuse the application by notifying the person concerned.

2.2. If the applicant meets the requirements laid down in the Law, but the documentation referred to in Article 23 of this Regulation is incomplete, the person concerned shall be notified, and the person concerned must complete it within the time limit of 10 years. business days counted from the day after the receipt of the communication. If the petitioner does not complete the said documentation within that period, the application shall be abandoned.

2.3. Once accepted as complete the required documentation, the Directorate General of Energy will order its publication in the "Official State Gazette".

2.4. The notice to be published shall contain only references to the personality of the applicant and the clear and precise delimitation of the requested permit.

2.5. Within two months of the publication in the Official Gazette of the State, other competing proposals may be submitted, in which case this circumstance shall be recorded in the book of registration.

2.6. The petitioners in competition will have to present the same documents and under the same conditions as set out in Article 23 of this Regulation, except those already held by the Directorate-General for Energy, but the limits of The requested area shall be the same as the permit with which the application is in competition.

2.7. During the same period referred to in paragraph 2.5. of this Article, it may be possible to present oppositions which are believed to be better entitled, to invade the requested land of another permit of investigation or to any concession of hydrocarbons. in force or in processing, or to invoke the concurrence in the applications of any of the limiting circumstances detailed in the Law.

2.8. If, within the period referred to above, any opposition has been lodged, the petitioners concerned shall be given the view, who shall reply to them within 10 days of the date of the hearing.

3. Once the request has been published in the "Official Gazette of the State", the holder of the same, as well as the petitioners who can present themselves in competition, will be able to deliver in the Directorate General of the Energy, within the indicated period of the two months, and for the purposes of Article 20 (1) and Article 23 (1.6), a closed and sealed statement containing a proposal for improvement of the conditions offered in the project or of any of the circumstances indicated in that draft. Article, which will only be opened after the deadline is completed.

4. After the two months, no new proposals on the area requested shall be admissible until the resolution is submitted.

Article 26.

1.1. After the deadline of two months, the documents shall be opened in the presence of the petitioners or their authorised representatives, reading to the contents of the proposals and following an act which shall be signed by the same, given by the content of the content. The non-attendance of some or some of the persons concerned presupposes the conformity of the minutes which is extended.

1.2. Within 60 days of the opening of tenders, the Directorate-General for Energy shall submit to the Minister for Industry his proposal on the oppositions, if any, and on the decision to grant or refuse the permission, in accordance with the criteria set out in Article 20.

2.1. In turn, the Minister of Industry will raise the corresponding proposal to the Council of Ministers for its resolution by Decree to be published in the "Official State Gazette". In the event of the granting of the permit for investigation, the validity of the permit shall begin on the day following that date.

2.2. In the case of concurrent or competing requests, the resolution may be awarded to a petitioner in the area who applied for a research permit or denied all requests.

2.3. The conditions under which it is granted shall be recorded in any grant of a research permit, the conditions of which are due to expire.

2.4. The holder of a permit must begin the investigation within six months of the publication of a grant in the "Official State Gazette". For this purpose, within three months, it shall present the plan of research to be carried out during the first year to be in accordance with the general plan accompanying the application.

Article 27.

1.1. The Council of Ministers, acting on a proposal from the Industry, may, when it considers it necessary to obtain the offer which best suits the national interest, open competition on certain areas not granted or in the process of being awarded to the A contestant who, by meeting the requirements laid down in the Law, offers the best conditions, in accordance with the criteria laid down in Article 20, to which the additional conditions laid down in the Law are to be added call.

1.2. The processing will be done in the same way as the one followed for requests to grant research permits.

2. For the purposes of the previous paragraph, the Directorate-General for Energy may temporarily suspend the acceptance of applications for certain areas, as long as the invitation to tender is dealt with by the Council of Ministers. To this end the resolution specifying the affected areas shall be exposed to the public in the notice board of the competent Unit.

Article 28.

1.1. The holder of a research permit shall in any event be obliged to develop the minimum work programme, recognition and investment work to be carried out, specified in the Decree of Grant.

1.2. In the research work on the permit, you will have to invest an average minimum of the following amounts during the period:

Zone A.-Initial period, one to six years: 150 pesetas per hectare per year.

First extension, seven to nine years: 400 pesetas per hectare per year.

Second extension, 10 to 11 years: 1,000 pesetas per hectare per year.

Exceptional extension, 12 to 14 years: 1,000 pesetas per hectare per year.

Zone C.-Initial period one to two years: 20 pesetas per hectare per year.

Initial period, three to eight years: 150 pesetas per hectare per year.

First extension, nine to 11 years: 600 pesetas per hectare per year.

Exceptional extension, 12 to 14 years: 1,000 pesetas per hectare per year.

1.3. The Ministry of Industry, in the light of the development of the costs of oil research operations, may propose the amendment by means of a decree of the quantities referred to above, in any event, in force of the preceding the period of validity which shall be in progress until the holder requests an extension.

1.4. Obligations that affect a group of permits included in a single perimeter, with identity of holders and dates of validity, may be developed within the area of one or more of the permits, justifiably justifying this application.

1.5. By way of derogation, the Directorate-General for Energy may authorise the transfer of investment obligations from one research permit to another non-adjacent one, the same holder, either in the same area or in a different area, where the it is technically proven, in the case of the administration, that the work on the permit is limited to the limit of the investments committed. In this case, the holder may not request the transfer of the obligations without, prior to or at the same time, the waiver of the research permit, which he intends to discharge from his obligations. To this end, the documentation and supporting documents referred to in Article 73 (1.2) shall be submitted. The acceptance of the waiver shall be made without prejudice to the security lodged in accordance with Article 23 (1.4), in order to respond to the full compliance with the investment obligations of the permit which is the subject of the waiver. affects the other to which it was transferred.

1.6. If the permits are close, but there are differences in the entitlements on the dates of validity, or measure any other particularity, the Directorate General of Energy will decide on the origin or the origin of the authorization. to transfer the investments according to the circumstances of each case.

1.7. At the beginning of each of the years of the permit, and within the first ninety days, the holder must present a Memory of the works executed, with the justification of their investments in the form provided for in point 1.3 (d) of the Article 11 of this Regulation.

1.8. If the investments envisaged in a given year could not have been carried out, for reasons which must be satisfactorily justified by the administration, this fact will be taken into account in order to increase the investments to be made. in the event that the permit is in effect. For these purposes, such obligations may not be cumulated with those corresponding to successive extensions.

1.9. One month before the end of each year, it shall also present the research work plan for the following year, as described in Article 11 (1.3) (a) of this Regulation,

1.10. If, within a period of one month, the Directorate-General for Energy has not objected to such plans, they shall be automatically deemed to be accepted if they do not contravene the provisions of the Law, this Regulation and the Decree of grant.

1.11. If, at the end of each of the periods of validity of the investigation, the compulsory investment programme had not been complied with during the period of failure to enter the Treasury, the infringement would in any event constitute non-compliance with the essential conditions of the grant, and will result in the loss of the right of extension and of the guarantee.

1.12. The holder of a research permit shall enjoy an initiative for the organisation and development of his research plans, without any other limitations than to comply with the proposed plan for each year, in accordance with the appropriate safety standards. people, goods, measures against pollution of the environment, and to meet the requirements that the Directorate-General for Energy may eventually impose on it. You should also observe preference in the use of Spanish equipment, materials, services or contractors.

1.13. If, during the course of the year, the observations or findings made suggest that the proposed plan is modified, the holder shall communicate any changes it deems appropriate, duly justifying its need. In any event, such alterations may not result in the total investments envisaged.

1.14. If the holder of a permit wishes to exercise a right to conduct a research survey, he shall communicate it in writing, at least one month in advance, with the implementation report described in Article 11 (1) (e) and in the paragraphs 1.2 and 1.3 of Article 35 of this Regulation.

1.15. Research surveys shall not be carried out within 100 metres of the limits of the permit, except where there is another border permit of the same holder, agreement between the adjacent ones, or prior authorisation of the General Directorate of Energy.

1.16. When the surveys are carried out with techniques of deviation from the vertical, the projection on the surface of the points on which the targets are reached, or in their case the bottom of the well, shall meet the distance requirements mentioned in the previous paragraph.

1.17. The drilling of a survey shall take into account all safety standards and measures necessary to prevent the evacuations or spills of brine, hydrocarbons or other pollutants from the environment. In particular, the requirements set out in paragraphs 1.9 to 1.17 of Article 35, as well as in Article 31, shall be maintained.

1.18. From normal and exceptional incidents, serious breakdowns, or hydrocarbon discoveries, and the results of the surveys shall be given to the competent Unit, by means of the reports described in Article 11 (1) (f), (g) and (h); and Article 35 (13) of this Regulation.

1.19. The holder shall keep the witnesses recovered and not used for analysis or other determinations at the disposal of the Energy Directorate-General. These collections of witnesses or samples may not be destroyed without authorization from the Administration, during the validity of the permit.

2.1. Exceptionally, the Ministry of Industry may amend the term of validity of the hydrocarbon research permits in zone C, when justified expectations of immediate technological development so advise.

2.2. In such cases, the Ministry of Industry, acting on a proposal from the Directorate-General for Energy, may set the new time limits for solving technological problems by means of the appropriate Ministerial Order.

3.1. The work of exploitation and research will be directed by Engineers of Mines, Licensed in Geological Sciences, Technical Engineers of Mines, Peritos of Mines or Facultals of Mines. When such work basically requires the use of geophysical or geochemical techniques, the above powers will be extended to those in the Physical Sciences and Chemical Sciences, as well as to other university graduates to whom recognize the relevant specialization. In any case, operations that may affect the security of the goods or persons or require the use of explosives, shall be directed by graduates of Mines.

3.2. The exploitation works shall be designed and directed by graduates of Mines, in accordance with their respective competences.

CHAPTER III

From the exploit

Article 29.

1.1. The exploitation concessions confer on their owners the right to exclusively carry out the exploitation of hydrocarbon deposits in the areas granted for a period of thirty years, renewable for two successive periods of ten years.

1.2. Extensions shall be granted whenever the holder so requests and, in advance of the grant of each of them, prove that he has met all the requirements set out in Article 36.

1.3. The right to the exploitation of hydrocarbons referred to in the first paragraph of this Article includes the activities of the purification, storage and transport of the discovered hydrocarbons, subject to the conditions laid down in the This Regulation.

Article 30.

1.1. The holder of a research permit shall request the granting of the holding. to the Directorate-General for Energy of the Ministry of Industry, at one or more times, by means of the corresponding application. This shall be recorded in the appropriate book of operating concessions.

1.2. Such an application shall be submitted by instance accompanied by the following documentation:

(a) A Memory indicating the status and extent of the concession requested shall justify the existence of hydrocarbons and the recoverable reserves shall be estimated; to this end they shall be described:

-Oil characteristics discovered.

-Depth, pressure and other physical characteristics of the underground reservoir concerned.

-Potential daily production capacity of each well drilled.

-Estimated reserves of the field and potential production capacity of the site or part.

-Likely life to the intended regime.

-Accessibility of the hydrocarbon deposit to the coast or to the large supply and distribution centers, taking into account the existing means of transport or whose construction was economically feasible.

b) A general plane of the permit or research permissions.

c) A plane of the area or areas whose operation is requested at scale 1:50,000 in zone A and 1:100,000 in zone C, in which the research permit and the concessions resulting from such permission shall be included.

d) General operating plan, with budget and plans of the facilities.

e) Investment programme, with the economic study of its financing and the guarantees offered on its viability.

(f) Economic study on the profitability of the holding, on foreseeable market prices.

2.1. The Administration shall decide on the granting of the concession, within three months of the date of the submission of the application, by means of a decree which shall take effect from the day following that of its publication.

2.2. Within the 40-day plan, the Directorate-General for Energy shall request the reports it deems appropriate and shall make the relevant comments on the plan of operation.

2.3. The Director-General of Energy shall, within 20 days from receipt of the reports, draw up his proposal on the origin of the award, to the Minister for Industry, who, if appropriate, shall submit the proposal in question. proposal, to the Council of Ministers for resolution by Decree.

2.4. The decision shall be granted to the granting of the concession requested provided that the holder has fulfilled all his legal obligations and the existence of hydrocarbons in exploitable quantities is demonstrated, which shall be done in accordance with the rules generally accepted by the oil industry, taking into account, among other factors, those which are deducted from the documentation referred to in paragraph 1.2 of this Article.

2.5. According to the provisions of Article 29 of the Law, the operating concessions are granted for a period of thirty years extendable for two periods of ten years under the conditions laid down by the Law.

2.6. All concessions derived from the same research permit shall be considered as a single concession for the purposes of the preceding paragraph, with the time limits for the same being calculated; from the date of the first grant.

2.7. The granting of the grant shall be made, if applicable, to adjust the bond or guarantee provided for the investigation, to the extent of the concession or concessions of exploitation granted, in accordance with the provisions of Article 35 (2) of the law.

2.8. The concession decree shall fix the period within which the concession holder shall commence the operation of the deposit, without the time limit being greater than three years, but which may be extended, in the case of the administration, where circumstances are present. exceptional justifications.

3.1. The operation of the deposit shall be in accordance with a general plan, proposed by the applicant and approved by the Administration, and the bases of which shall be laid down in the Decree referred to in the previous paragraph. In any case, when reasons of national interest so advise, this plan may also be modified by Decree. It shall also be in accordance with the annual plans to be submitted to the Ministry of Industry, three months before the beginning of each calendar year, the approval of which has been granted where no express resolution has been given before the end of the calendar year. start the corresponding period.

3.2. The concessionaire shall submit to the Ministry of Industry, three months before the beginning of each calendar year, for approval, the programme of work and exploitation for that year.

3.3. In the year of the commencement of the holding, such a programme shall be submitted at least three months before the establishment of the premises and shall cover the period between the beginning of the holding and the end of the calendar year.

3.4. The changes which must be made by the holder, in the programme provided for, must be submitted to the Ministry of Industry within 30 days of the need to carry out them, and shall be deemed to have been approved, if they are not received. notification to the contrary within thirty days.

3.5. In accordance with the provisions of this paragraph 3.1 if, for reasons of national interest, the annual operating programme is to be altered, the Ministry of Industry shall notify the person concerned of such effects at a time of not less than 30 days before the resolution, which for this purpose shall be delivered by the Directorate-General for Energy.

4. If the time limit for a research permit has expired before the granting of the requested holding has been granted, the permit shall be extended until the decision of the concession file is resolved.

Article 31.

1.1. The part of the area affects a research permit that is not covered by the concessions of exploitation granted, it will revert to the State at the end of its validity. The latter may take up its investigation and exploitation directly, or authorize it, by means of a tender in the form and conditions specified in this Article.

1.2. The call for tenders shall be made by the Directorate-General for Energy in its case by publication in the Official Gazette of the State before six months of the reversal. The notice of competition on such areas shall be carried out separately for each of those that constitute an independent unit, expressing the data necessary to identify the area clearly, detailing its precise delimitation by coordinates geographical, and other data contributing to its location, such as provinces and municipal terms.

1.3. The notice shall also indicate the closing date for submission of the tender documents, which shall not be less than 90 days from the publication of the notice and possibly preferential conditions for granting it.

1.4. Any legal person who is awarded a research permit or operating concession may be presented to such competitions, if they do not exceed the limits for a single petitioner as referred to in Article 19 of the Law, and those who not being the holders of permits and concessions, they demonstrate in an appropriate way to their proposals that they meet the conditions required in Chapter I.

1.5. Proposals should obtain the following documents:

a) Instance in which the name, address and other characteristics of the contestant are recorded.

(b) Supporting documents of being the holder of research permits or concessions for the exploitation and expression of the number and surface of the air that are granted in each area by one and another concept, as well as of the solvency technical and economic at the time of the application. If it is not a holder of permits or concessions, it shall accompany the documents required in paragraph 1.1. of Article 23.

(c) The research project described in Article 1.3. of Article 23 of the Law, in which the investments to be made may not be less than the minimum required by Article 28 of this Regulation.

(d) Credit proof of income in the General Deposit Box of the guarantees referred to in Article 1.4. of the repeated Article 23.

e) Improvement in favor of the State, as a percentage of participation free of expenses, in tax conditions, in economic bonds or other.

1.6. The documents described in (c) and (e) shall be presented in closed and sealed documents in the Special Register of the Directorate-General for Energy, clearly indicating the name and address of the contestant and the contest to which it is presented.

1.7. After the deadline for the submission of affections, the documents containing them shall be opened in accordance with the conditions laid down in Article 26 of this Regulation. That act may present opposition to applicants who do not comply with the conditions of Chapter I or who exceed the limitations of Article 19 of the Act.

1.8 The processing will continue in the same way and conditions as for the granting of research permits are indicated in Articles 25 and 26 of this Regulation.

2.1. The part of the area reviewed in paragraph 1.1 of this article will be declared free and registrable, not being applicable the limitations of the Law and this Regulation, in terms of form and extension of the permits and concessions, when the The State has decided to authorise the investigation or exploitation by a third party and the contest has been declared deserted in two successive calls or when the Administration itself has not agreed to investigate or exploit itself in the six-month period from the reversal.

2.2. Convoked the contest, if no offer is submitted in business time, or not to be of interest, in the judgment of the Administration the ones presented, this will declare it desert, being able to decide to investigate and in its case to exploit the segregated area, in itself, to grant their ownership to domestic companies or to take them out for a new tender within one year from the date on which the first one was declared deserted.

2.3. If no contest has been made within that period or, in the latter case, no award, the area shall be deemed to be free and registrable from the date of expiry of the period or publication in the "Official State Gazette" of the decision declaring the contest.

Article 32.

1. In the case of extinction provided for in Article 18, the State shall assume its exploitation directly or through undertakings with majority state participation.

2.1. The areas reverted to the State from segregated, ineffective, expired or extinguished permits or concessions if they were not investigated or exploited directly by the State or by companies with majority state participation, directly or indirectly, may be the subject of a tender for the award of which shall be made in any event subject to the conditions of the Law and in the manner provided for in Article 31 of this Regulation.

2.2. If, within six months of its reversal, the designation of the State-owned undertaking which is to take up the work, or a call for tender for its award, has not been produced, it shall be understood as free and recordable.

3.1. It is considered as an excess of any free or frank area, comprised between those of two or more research permits or operating concessions, or between these and coasts or borders, whether or not closed, which cannot be granted under the Law, as the investigation permit, because it does not meet the requirements of form or extension as set out in Article 16 of this Regulation.

3.2. The Directorate-General for Energy, at any time by its own decision or by accessing at the request of any of the holders of permits or concessions adjacent to an excess, may simultaneously require all the adjoining persons to, if they are interested in, may submit applications for the whole area of it if it is closed, or on the one that is closed by the said Directorate, in the way that it makes more convenient.

3.3. The applications referred to in the preceding paragraph shall be accompanied by a guarantee that the quantity of 25 pesetas per hectare is deposited in the General Deposit Box, as a guarantee, in cash or securities.

3.4 The excess will be awarded to the applicant who, in the administration's view, offers more effective action among the applicants, in view of the conditions under which they are granted their permits for research or exploitation.

3.5. Such award shall be granted, in any case, by ministerial order approved by the Council of Ministers.

3.6 All award requirements shall be fulfilled, the guarantee shall be returned to all other applicants within a period of 15 days.

3.7. The area awarded as an excess shall be added to the research permit to which it is awarded with the same character and as a whole with that to all the effects of the Law.

3.8. Where, as required by the relevant holders, they do not submit an application for award, the Directorate-General for Energy shall declare it to be frank and registrable, even if it does not have the required dimensions or dimensions, and are excluded from its application. subsequent holders, during the validity of the permits that gave rise to such an excess.

Article 33.

1.1. The areas to be granted may be in the form requested by the petitioner, but they shall be defined by the grouping of quadrillaters of one minute's side, in coincidence with whole minutes of latitude and longitude, attached at least for one of its sides.

1.2. The surface so defined shall be limited by a single, closed boundary or polygonal line.

Article 34.

1. An operating concession shall have at least one area of 3,000 hectares. The total area of the concession, or concessions, in the case of multiple applications, as provided for in Article 17 (2) of the Law, shall not be greater than half of the initial area of the research permit for which the are derived. This limitation will not be required, the original area of the permit, as it is a special area awarded in contest or for another reason, is between 6,000 and 3,000 hectares, in which case the concession would be 3,000 hectares. If the original area is less than 3,000 hectares, it should be fully converted into concession.

Article 35.

1.1. Dealers must fulfil the following technical requirements and requirements in their work:

1.2. The holder who intends to drill a well of exploration, or of the holding shall transmit in duplicate an implementation report, at least one month before the start of the work.

1.3. This implementation report shall comprise the following data:

1. The name of the dealership.

2. The well designation, its location and coordinates with the information necessary to locate it accurately, and the relative situation in the concession should be attached.

3. Objectives, initial cote, and expected depth of the well.

4. Team to be employed.

5. Encasing and Finishing Program.

6. Budget.

1.4. The holder shall also inform the Provincial Delegation of the Ministry of Industry concerned, in compliance with the requirements of Article 6. of the Law of Mines 22/1973.

1.5. When the holder wishes to deepen an already drilled well, he will communicate it in the same way, supplying the relevant information.

1.6. Wells may not be located at distances below:

1. º One hundred meters from the limits of the concession, except in the case of separation with another concession " or research permit from the same concessionaire.

2. º Fifty meters of workshops, hydrocarbon deposits and other industrial facilities, pipelines or gas pipelines.

3. Hundred meters of buildings for housing.

4. º Four hundred meters from other wells in production.

1.7. The distances referred to in this Article may be modified where the special circumstances of each case so advise.

1.8. The distances referred to in paragraph 1.6 of this Article may be reduced, where the holding agreements conclude operating agreements with respect to the two hundred metre girdle, formed by the two 100 metres of the concessions. The following shall be approved by the Directorate-General for Energy.

1.9 The owners must take all precautions to prevent damage or risks, which as a result of the operations, may affect the safety of human lives, property, nature reserves, coasts, places of tourism interest and public facilities.

1.10. The machinery, equipment and materials used in the course of operations must meet the conditions of safety and efficiency recognized by the oil industry and those of the Mining and Metallurgical Police Regulations and their complementary are applicable.

1.11. During drilling operations, the operator shall:

a) Provide the equipment well and materials needed to prevent rashes.

b) Protect all strata containing drinking water by coating and cementing pipes.

c) Protect the strata containing oil or gas by coating and cementing pipes. However, in the case of production resulting from dense and fractured rocks, such a portion of the well can be left without the protective lining pipes.

d) Take care of collecting the appropriate geological samples from the well in drilling.

e) Carry out all appropriate examinations, such as electrical, radioactive, sonic and any other diagnostic records that may be necessary for the good knowledge of the formations crossed.

1.12. From the data obtained in the tests and surveys referred to in this Article, it shall be reported in the end of survey report referred to in paragraph 1.13 below.

1.13. Within two months of completion of a new well or of an existing one, the operator shall submit an end-of-survey report with the data referred to in Article 11 (1.3) (b) and in particular the following:

1. The summary summary of the survey in the format set out in Annex No 1 to this Regulation, or the one set out by the Directorate-General for Energy.

2. º Memory with full collection of the following data:

a) Name of the well, situation, coordinates, soil and rotation table. Total depth and current depth if part of the well was plugged. Start and end date.

b) Geological and paleontological results. Description of the column crossed, with indication of the roof of the formations: Extracted witnesses and their nature.

c) Oil results. Signs found. Production tests carried out and their interpretation. In the case of a productive well: nature of the hydrocarbon, its density, percentage of water and sediment, initial production, production method, diameter of the orifice through which the hydrocarbon flows, gas to oil ratio, pressure at the bottom of the well and at the top of the production line. Observed drops of pressure. Procedures used to stimulate production and its results.

d) Mechanical parameters. Perforated diameters. Deviations from the vertical. In-place and in the case of recovered cases. Cementifications. Finishing systems and well control devices. The abandonment procedure used in your case.

e) Probe records. The normal scales in the industry will be accompanied by reproducible and in normal copy support: main graph of the survey with its geological, mechanical and oil presentation and the collection of diagrafias, measurements of speed of seismic propagation and other records performed.

1.14. When a new well is abandoned, for technical reasons or because no oil has been found in commercial quantities, the operator shall take the necessary precautions to ensure that the abandonment takes place after it is covered, in accordance with the principles accepted in the industry.

1.15. In the event that the holder decides to leave a well that has had commercial production of oil or gas, or that has been used to stimulate production in other wells, he must, before doing so, communicate to the Administration, its purpose of abandon it and the reasons for it, the amounts of the casing calculated which could be recovered, the projected abandonment procedure and the observations on the possibility of obtaining fresh water.

1.16. Where the holder does not wish to cover a dry or non-commercial well, in order to be used as an observation or injection well or for similar purposes, he shall communicate this in the well finishing report, for the purposes and plans of its use.

1.17. In all production, injection or observation wells, the operator must install appropriate surface and background equipment in order to perform the following operations:

a) Properly control the production and injection of fluids.

b) Allow measurement of the downhole pressure.

c) Prevent the unplanned mixing of fluids from different fields.

d) Maintain the security of the field, people and goods and avoid environmental pollution. In the case of underwater wells, the safety equipment of the bottom of the well shall be such that the obturation of the survey is foreseen, in the event of a disaster on the surface elements.

1.18. The holder, when installing in a survey the production equipment, shall carry out the necessary tests to determine its maximum production and collect data with respect to its best possibilities. In the new fields it will also take background fluid samples in those injection or observation wells that are representative.

1.19. During the course of operations, including those for the fitting or plugging of a well, the operator shall transmit weekly progress reports and progress reports.

1.20. Within two months, from the date of the fitting, or abandonment, or suspension, or reequipped of any well, the holder shall present the following documents:

a) The well abandonment report, including all the information specified in section 1.13 of this article.

b) Copies of the available diagraisies.

1.21. In the event of an eruption, the operator shall immediately notify the relevant unit of the Directorate-General of Energy and simultaneously to the Provincial Delegation of the Ministry of Industry concerned. As soon as possible, it shall submit to the Ministry, through that unit, a written report indicating the causes of the eruption and the measures taken to control it, as well as an estimate of the oil and gas lost, destroyed or allowed to escape. The operator, once the well has been controlled, shall present the final report of the accident as soon as possible.

1.22. When a borehole is to be abandoned due to mechanical causes, the operator shall notify it, specifying the reasons and the method used for its abandonment. If the holder decides to drill a replacement well at a point that you did not give more than 50 metres of the abandoned well, he shall notify it in writing without further action being necessary.

1.23. In the event that a change is to be made to the producing intervals of a well, or any major alteration in its normal conditions, the holder shall also notify it. Such Notice Will Include:

a) Name and location of the well.

b) Nature of the work to be done and its program (such as repair, deepening, plugging, reconditioning, or any other types of work).

c) Razones for the proposed job.

1.24. No oil well will be allowed to produce above its most efficient and economical regime and, to that effect, the gas, oil and water ratio of each well, individually, will be regularly controlled by the dealer.

1.25. At least once a year, the concessionaire shall carry out the downhole pressure surveys in a sufficient number of selected surveys, in order to obtain information on the average pressure of the field, and shall be transmitted by the results of such recognition to the Adminstration, within one month from the date of its execution.

1.26. In wells where abnormal pressure levels appear, the necessary corrective measures must be taken in accordance with the standards of the oil industry.

1.27. Within the first 15 days of each month, the concessionaire shall, in duplicate, submit a production report for the previous month, which shall contain at least the following information:

(a) A stage in which a ratio of all the production wells is shown for each field and for each field, and the following data for each of the wells:

-Date of the last production test and its results. Daily production, gas-oil ratio, wellhead pressure, throttle size, oil API grades, bottom sediments, and water percentage.

-Number of days in production.

-Well status at the end of the month.

-Monthly and cumulative oil production, as well as gas and water for each well, reservoir and field.

(b) Destination given to crude oil, gas and derivatives produced, indicating the quantities used in the work of the concessionaire, those intended for domestic consumption and the exported part, if any.

(c) Gross income from the sales of hydrocarbons and derivatives.

1.28. Before six months after the discovery of a deposit, the concessionaire shall submit a report containing the information. Such a report shall contain, inter alia, the analysis of rocks and fluids, production and pressure records, diagrafias and any data obtained by the concessionaire and which may be used as a basis for structural, isobaric and isopacal maps, estimation of the nature of the force or forces acting on the field, and any available data to facilitate the forecast of the formation of the field.

1.29. In the month of January each year, a report will be submitted with the update of the above data.

1.30. At the time when it is deduced that from continuing production with the operating system followed, the deposit may be damaged or the final recovery adversely affected, the concessionaire must take the corrective measures immediately, accounting for the same.

1.31. The initial report, as well as subsequent annual reports, will include data on the basis of which the deposit reserves can be estimated.

1.32. The concessionaire shall recover from a field where it is technically and economically justified. The Ministry of Industry may sanction the concessionaire if such secondary recovery is not undertaken diligently.

1.39. Where the concessionaire tries to use secondary recovery methods of fields, either by injection of gas, water, air, steam, solvents, or by any other method, he shall submit a project containing the following data:

a) The name and description of the field and field in which it is located.

(b) Those which have been obtained by the concessionaire and which serve as a basis for structural, isopacus and isobaric maps; a map of the field in which all the wells drilled therein are shown; producers and to retrofit the injection and location effects of the wells to be drilled and their destination.

c) Description of the system to be used; its power supply and estimated quantity that will be injected daily.

d) Production of each well, with data from the most recent pressure acknowledgements.

e) Results of the tests that could be performed.

f) Information that the concessionaire has obtained as a basis for the development of the field; graphic representations of the anticipated capacity of the field subjected to natural exhaustion and under the proposed method of recovery secondary.

g) Project budget.

1.34. Once the recovery operations have been initiated, the concessionaire shall send a monthly report indicating the volumes of the fluids produced and, where appropriate, injected, both monthly and cumulatively, as well as the pressure of the the injection. The pressure of the field and the variations therein shall be communicated in accordance with paragraph 1.25 above.

1.35. In the case of suspension or abandonment of a secondary recovery project, the concessionaire shall send a report indicating the reason for the suspension or abandonment, the results obtained to date and any other relevant data.

1.36. In the event that a deposit is extended to an area belonging to more than one concessionaire, the Administration may require the parties concerned to reach an agreement between them for the best exploitation of that field.

1.37. If, within six months of the request, the concessionaires concerned have not concluded such an agreement or have agreed on the procedure to be followed, the Administration may draw up a proposal for an agreement subject to the agreement of the dealers concerned. If such conformity is not obtained, the Directorate-General for Energy, the interested parties, will submit a proposal to the Minister for Industry, which, if approved, will be mandatory for the parties. Any agreement on this agreement between the concessionaires shall be subject to prior approval by the Ministry.

1.38. The concessionaire shall install the equipment necessary for the proper separation of the oil from the gas, so as to ensure the most economical recovery of the liquid fraction. Appropriate size counters shall be mounted to effectively measure the gas in the driving of each test collector, as well as in the outlet tubes that transport it for use.

1.39. The concessionaire shall take all kinds of measures for the use of the associated gas which are economically justified, for any of the following purposes:

a) Maintenance of pressure inside the field, according to technical procedures recognized in the oil industry.

b) Any commercial or industrial use, including use as fuel in the dealership's own facilities.

c) Injection into strata containing oil or other suitable strata, or underground storage according to technical procedures recognized in the oil industry.

d) Extraction of natural gasoline and other lighter liquids contained in wet gas.

1.40. Any associated gas that cannot be used or returned to the subsoil, must be destroyed with the precise safety measures. In order to give this destination to the gas it will be necessary the permission of the Directorate General of the Energy, who will grant it when it has been proved satisfactorily that the seized advantage is not economically feasible in the previous section and In the destruction of gas the standards for the Protection of the Atmospheric Environment contained in Law 38/1972 of December and supplementary provisions will follow.

1.41. The dealer who wants to produce or have gas production not associated with oil will be obliged to take advantage of any gas produced by him in the same area that is not yet, unless he gets special authorization from the Directorate General of Energy due to circumstances that may be present.

1.42. The operator shall remove any saltwater outlet whatever its origin, whether associated or not, with the oil in such a way as to cause no damage to crops, inland waters or property, by any of the following procedures:

a) By injection into the strata from which it is derived, or in other strata where it has been found to contain salt water.

b) By evaporation in specially excavated holes, or in rafts constructed for the purpose of sufficient guarantees against breakage or spillage.

(c) Any other effective procedure approved by the Ministry of Industry.

1.43. The holder shall take the necessary precautions to avoid the oil spill on the surface. The oil produced in the production tests carried out during the drilling and equipped of the well which cannot be recovered, as well as any other oil residue, shall be burned by appropriate mechanisms, or in holes opened for that purpose, or removed by any other procedure. The concessionaire shall take the necessary measures to avoid contamination of the waters, the earth, and the air, in accordance with the requirements of Article 81.

1.44. The operator shall notify the Directorate-General of Energy at the same time, and the Provincial Delegation of the Ministry of Industry concerned, by the quickest means, the fires, breakdowns or leaks of importance, which may occur in heads The invention relates to a well, a discharge pipe, a pipe collector tubes, tanks or any such installation. It shall also send the Ministry through the competent unit a detailed written report, as soon as possible. Such a report shall include data relating to the site and causes of the disaster, as well as measures taken to remedy the same and quantity of oil and/or gas lost, destroyed or let out.

2.1. In order to ensure compliance with the obligations referred to in paragraph 1, the security provided for in Article 23 shall be maintained throughout the period of operation in the proportional part corresponding to the area granted.

2.2. To this end, within 15 days of the granting of the last concession arising from a permit to research, a bond shall be entered in the General Deposit Box for each derivative concession obtained, referring to its area, and the corresponding safeguards will be presented in the Directorate-General for Energy. It is within the next 10 days, will rule on the return of the deposit and the cancellation, if any, of the bank guarantee affects the research permit.

Article 36.

1. The operating dealer who wishes to obtain an extension of the concession shall, at the request of the applicant, at least one year before the date of expiry accompanied by the following documents:

1. th concession or concession planes whose extension is requested.

2. Description of storage, transport, debugging and refining facilities, which the concessionaire has subsidiaries of the concession or concessions whose extension is requested.

3. A Memory with the following data:

(a) Statistics of the productions obtained in each year of the holding. Wells, drilling and research carried out in the period.

(b) Reserves estimated at the beginning and end of the holding.

c) Ritmo that is proposed for future exploitation and probable life of the field.

(d) Investments made and compliance with the obligations inherent in the period of the concession that ends.

2.1. The extension shall be granted provided that:

1. The concessionaire has fulfilled its obligations under the Spanish legal order and the title of the concession, unless it has been prevented from any cause of force majeure duly justified, in the opinion of the Administration.

2. º The concession is in active period of operation.

3. The concessionaire agrees to submit to all obligations establishing the laws in force at the time of the expiration of the original time of the concession and also to meet any other requirement that the laws in force on the material.

2.2. The Ministry of Industry within three months, will study the application and check if the dealer has complied with the provisions of the Law, this Regulation, and the special ones that were imposed on it in the Decree of Grant.

2.3. The Director-General of Energy, within one month of receipt of the relevant reports, shall submit his proposal to the Minister of Industry, who shall raise it, if appropriate, to the Council of Ministers for resolution by Decree.

2.4. The extension of the concession shall, in any event, start from the date of termination of its term of validity.

3. In the case of granting of the extension, it must be submitted, within 15 days of the date of notification of the grant, proof of having entered the Treasury an amount equal to twice the guarantee indicated in the Article 23 (1), under Article 23 (4), for each hectare of area of the concession for which the extension is requested, without prejudice to the deposit or the guarantee first constituted in the same proportion as the reduction, if any, of the said surface.

Article 37.

1.1. By reverting to the State a concession for annulment, revocation or extinction, all wells, permanent equipment for the exploitation and conservation of the same and any stable works of work shall be for the benefit of the State. permanently incorporated into the work, except: main oil pipelines, sewage treatment plants, refineries and mobile equipment. The reversal shall not be free of charge in cases where a declaration of national interest is made.

1.2. The concessionaire is entitled to disassemble and remove only the exempted facilities from reversion and make them the use that best suits their interests.

1.3. However, if the State decides to continue the exploitation of the reversed concession, it may make use of the powers granted to it by Article 42 of the Law, following the procedure laid down in paragraphs 2.1 to 2.5 of the article. 42 of this Regulation.

2.1. The Administration may authorise the holder of an operating concession, and at his request, the use of the facilities of any kind and stable works located within the concession and incorporated permanently into the work operating and that, in accordance with the provisions of the Article, revert to the State, if at the time of the reversal they are used for the service of concessions of exploitation or permits of investigation of the same holder or in which it is involved majority, under the conditions laid down in this Regulation.

2.2. Where the holder of an extinguished concession wishes to make use of this right, he shall request it from the Administration, justifying the need to continue to use the facilities and works which have been reversed for the service of concessions. exploitation or research permits adjacent to it.

2.3. Upon request, it shall accompany the offer of the lease which it undertakes to satisfy for the use of such installations and works which may not be less than the legal interest of the capital representative of the value of such facilities, determined Otherwise, a reasonable fee for attrition or depreciation.

2.4. This right of use shall not be exercised where the reverse concessions are the result of being rendered ineffective by virtue of the provisions of Article 72 (2).

2.5. Where the State does not consider it appropriate to continue the exploitation of a reverse concession itself, it may give it in any of the forms admitted in the Law of State Contracts, through the formalities established in the law and rules regulate them.

CHAPTER IV

For transport, storage, debugging, and refining

Article 38.

1. Operating dealers may refine and industrially manipulate hydrocarbons which they obtain in excess over those which are compulsory for domestic consumption, and to devote this excess to export, as provided for in Article 60.

2. In the case where the concessionaires set up installations to perform the refining or handling operations covered by the preceding paragraph, they shall be obliged to make available to the internal market the products obtained in the quantity and during the period to be determined, where the Government so provides for reasons of national interest.

3. The sale of products subject to the Law and this Regulation and affected by the special legislation governing the Monopoly of Petroleum, and within its area, shall be made to the latter, except those for export with the due to the government's authorisation. The storage and transport of these products will in any case be controlled by the monopoly of oil within the peninsular territory and the Balearic Islands, in accordance with its special legislation and without this audit onerous character for dealers.

Article 39.

1. Where a dealer wishes to transport, store, purge or refine the extracted or benefited hydrocarbons, he shall submit his application in triplicate in accordance with the relevant requirements of this Regulation. The application shall be accompanied by a supplementary copy for each of the provinces concerned by the installations concerned.

2. These installations, their operation and their safety conditions will be governed by the specific regulations, by legislation on nuisance, unhealthy, harmful and dangerous activities and on the protection and conservation of the environment.

3. Transport:

3.1. In the case of mounting installations for transporting the substances extracted by fixed elements from the field to the refining or use plants or to the port of lading, they shall submit their request, together with the The following documents and data:

a) A descriptive description of the technical aspects involved in the project.

(b) Site placement, with indication of the place, term, municipal or province, specifying whether the pipeline or pipeline exceeds the limits of the concession.

c) The plans for the project. These shall include the layout of the driving and the longitudinal profile of the area crossed.

(d) In the description of the facilities, the characteristics of the pipeline and the tests of the pipeline, the number, location, capacity and power of the pumping stations, the capacity of the storage facilities shall be detailed. the pipeline or pipeline, and indication of the procedure to be adopted for the protection of the pipeline.

e) The budget of the works to be performed.

f) Start and end dates for jobs.

g) Security measures to be taken to prevent the use of installations that are projected to constitute a risk to the physical integrity or health of persons, damage to third parties, or contamination by breakage or breakdowns.

3.2. Where a dealer wishes to use a pipeline or pipeline from another owner, for the transport of the products extracted in his concession, he shall direct himself directly to the concession, and if they reach an agreement, they shall take account of the Administration, stating the following ends.

a) Place of delivery and how to perform.

b) Maximum and minimum monthly transport quantity.

c) Conditions to be met by crudes or gases.

d) Transport price per unit and, where applicable, delivery conditions.

e) Tolerated Mermas.

f) Contract duration.

3.3. If there is no agreement between the parties, but the pipeline or pipeline will have excess capacity for the needs of its owner, the Administration may require the parties to reach an agreement within six months. If this is not achieved, the Ministry of Industry shall initiate a file in which the Superior Council of Industry and the interested parties may impose the use of excess capacity in favour of the non-owner by payment of a Tariff also fixed by Ministerial Order, to this effect the Director General of Energy, will raise the proposal to the Minister within twenty days from the receipt of the said consultations.

4. Storage.

4.1. Where the concessionaire wishes to mount storage facilities, the application shall be accompanied by a descriptive report, which shall contain the following points:

(a) Site location, with indication of the site, municipal and provincial terms, specifying whether such facilities are to be mounted within the limits of the concession to which they are affected or on external land to them.

b) Description of the facilities, in accordance with the purpose for which they are intended. Capacity and plans of the same.

c) The budget of the works to be performed.

d) The start and end date of the jobs.

e) Security measures taken.

4.2. In the case of a request for storage facilities, the Director-General of Energy shall, within 30 days, raise his proposal to the Minister for Industry, for resolution.

In any case, the resolution may not ignore the right to mount such facilities, but may impose conditions regarding its security.

4.3. The location of the storage tanks, their distances, safety standards and other characteristics shall be made in accordance with the specifications of the Safety Regulations for Refineries and Storage Parks which are in force.

4.4. Storage in underground structures other than those constituting the hydrocarbon field, as well as in other artificial structures, may be authorised by means of the system governed by Articles 34 and 35 of the Mining Act. 23/1973.

5. Debug.

5.1. The operating concessionaire may construct and use the precise facilities to put the raw or extracted gases or gases in transport and market conditions, such as decanting and depurging facilities to remove the water from the raw water. or sediments, installations for the removal of gases and condensation of easily liquefiable gases, the purification of gases and the possible use of impurities or any other impurities which may be indispensable for such purposes.

5.2. The operating dealer who wishes to make use of the powers granted to him by the previous paragraph, must request it from the Ministry of Industry, presenting, with the application, cable in each case.

a) Site of the installation.

b) Reasoned description of general operation.

c) Planes relative to the project.

d) Facilities budget.

e) Relation of security measures to be taken for the operation of the facilities to ensure the health and physical integrity of the workers and to prevent damage to third parties.

(f) Provisions adopted at the plant and in the disposal of waste, which prevent pollution of the environment.

5.3. The Directorate-General for Energy will, within thirty days, raise its report-proposal to the Minister for Industry-for its resolution.

6. Refining.

6.1. Where a holding dealer wishes to set up refining facilities in accordance with the power granted to him by the first paragraph of Article 38, he shall address the Minister for Industry, submitting the application, together with the justification that is in a position to produce surplus crude for export, in sufficient quantities to ensure the economic exploitation of the refinery.

6.2. In any case, it must prove to the satisfaction of the Administration that the rate of extraction projected for the field is adequate to the magnitude of its reserves, according to what is generally admitted in the oil industry.

6.3. Within 60 days, the Directorate-General for Energy shall decide on the origin or the origin of the Energy.

6.4. If the decision of the Director-General of Energy is in favour of the petition submitted, the concessionaire shall, within six months, complete his application with the following documents:

a) The description of the project facilities, detailing the procedures and facilities to be used and the range of products in quality and quantity. The site of the refinery and intended transport system shall be clearly expressed in the memory in order to supply it with the crude from the concession or concessions to be affected.

b) General plan of location of the installations and of the different parts or elements that the component, operating scheme, all of them in the detail sufficient to be able to judge the project.

(c) Detailed budget of the facilities and works, with the expression of the machines, elements or installations that must be imported and those that can be obtained in time and reasonable conditions in the national market, agreement with the planned programme.

d) Run time and development program.

e) Security measures taken at the facilities and devices used to control pollution of the environment.

6.5. The Director-General of Energy shall raise the proposal for a resolution within thirty days to the Minister for Industry.

Article 40.

1.1. The transport referred to in the Law and this Regulation shall be carried out by the holder of the concession, by means of fixed elements of his property, between production facilities and storage, purification and refining facilities. subsidiaries of the oilfield.

1.2. Storage and transport facilities of several associated dealers operating in nearby areas may also be authorised to carry out such services in common. In such a case, the application must clearly state the concessions to which it is intended to be used, and must be subscribed by all the dealers concerned, with an indication of the proportion in which each of them participates. A single manager or representative shall be appointed to the Administration in the application.

1.3. The processing shall be in accordance with Article 39 (3) and (4) of this Regulation.

2. The transport of commercial products, whether crude or refined, liquid or gaseous, made by dealers by means of installations not covered by the above paragraph, shall be subject to the general or special legislation applicable in each case.

Article 41.

1. In the shared ownership of a concession or group of concessions, the refining activity referred to in Article 38 may be exercised only by one of the holders or by a company consisting of several of them exclusively for the purposes of the this end.

Article 42.

1.1. The authorisations for transport, storage, purification and refining shall expire when the operating concessions are extinguished.

1.2. Where a storage, transport or purification facility is designed, authorised and constructed for the joint service of several operating concessions, whether owned by one or more dealers, the corresponding authorisation shall be extinguished at the same time as the last grant in force for those for which the installation is used.

2.1. The State may agree to the acquisition of the facilities, machinery and other elements used in these activities, subject to payment of its value, in accordance with the provisions of the Law and this Regulation. The State may also authorize the transfer of the facilities to a legally constituted undertaking, in any of the forms admitted by the Law on State Contracts.

2.2. If the holder wishes to withdraw the facilities from the extinction of the authorisation, he shall request it from the Ministry of Industry one year before the date of its expiry.

2.3. The holder, if the State has notified its decision to acquire the facilities, must appoint a Perito appraiser, putting it to the attention of the Administration, so that, in turn, he will appoint his, both Peritos, meeting, will appoint a third.

2.4. The appointment of the Perios of the Ministry of Industry and the holder shall be made within two months of the notification, and of the third, within the following month.

2.5. If the appointed Peritos do not agree to designate the third party, the latter shall be appointed, at the request of the Administration or the holder, by the Institute of Civil Engineers of Spain.

CHAPTER V

Taxation

Article 43.

1. Undertakings which are engaged in the investigation and exploitation of natural, liquid or gaseous hydrocarbons in any of the areas referred to in Article 2 shall be subject to the general system of taxation, with the exception of specialities which establish in the Law and in this Regulation.

Article 44.

1. The holders of research permits and operating concessions regulated by the Law shall be obliged to pay the surface of mines according to the legislation in force, except for the amendments established by the Law.

2. The fee shall be required per hectare per year according to the following scales:

SCALE FIRST

Research Permissions

		Pesetas
1. During the permission period	1
	2. During the first extension	2
3. During the second extension	4
4. During possible and exceptional third prorogation	4

SCALE SECOND

Exploitation concessions

		Pesetas
1. For the first five years	25
2. For the next five years	70
3. For the next five years	185
4. For the next five years	230
5. For the next five years	185
6. For the next five years	95
7. During extensions	70

3. The area fees specified above shall be payable in favour of the State on 1 January of each calendar year in respect of all permits or concessions existing on that date, and shall be satisfied during the first quarter of the year. at the Delegation of Finance of the province where the holder is domiciled. To this end, the Directorate-General for Energy of the Ministry of Industry shall communicate to the Finance Delegations the grants made.

4. Where the research permits or operating concessions are granted or extended after 1 January, the part of the annual quotas corresponding to the quota shall be paid in the year of the grant or the extension. time from the date of the grant or extension to the end of the calendar year. In such cases the fee shall be payable on the day of the grant or the extension and shall be satisfied within 90 days from that date. In the year of the expiration of the period of validity or of the extension of the permit for investigation or the granting of exploitation, the fee corresponding to the effective days of validity in that calendar year shall be paid. It is understood that if a permit is waived before the end of a calendar year, the portion of the licence fee corresponding to the missing months shall not be reintegrable.

Article 45.

1. The companies referred to in the Law shall be subject to the General Tax on the Income of Societies and other Legal Entities, the charge of which shall be made in accordance with the laws and regulations in force in this matter as soon as they are not modified. which has the Law and this Regulation, and in particular the rules of the following Articles.

2. The taxable amount shall be the net profit obtained by the undertaking in the respective economic year resulting from the deduction of the gross receipts from the amount of the costs necessary for obtaining it.

Article 46.

For these purposes, and as far as companies whose social object is exclusively the investigation and exploitation of hydrocarbons are concerned, the following rules shall apply:

A) They will have the revenue consideration:

(a) Those from natural, liquid or gaseous hydrocarbons produced in the concession, sold in the economic year, for domestic consumption or for export as well as those that may correspond to them application of Article 81, which shall be valued at the prices fixed by the Government, in accordance with Article 59.

(b) Derivatives of the activities of the company or of any other source that increases the activity of the company and of the non-application, Article 52 of the Law.

(c) The amounts transferred from the exhaustion factor account to the results shall be computed as income from the financial year in which such transfers occur.

B) They shall have the consideration of deductible expenses, in addition to those arising from the application of the general corporate tax rules, the following:

B) 1. All expenses incurred under the concession of exploitation for acquired or used materials, or for services received, including insurance and pensions, corresponding to the respective financial year.

B) 2. The amounts due on the basis of charges-excluding surface charges-or any indirect tax which the company is not exempt under the law.

B) 3.1. Losses incurred as a result of damage, destruction or disappearance of assets of the asset, including losses due to change or by virtue of debts or claims to the concessionaire as compensation for damage caused, to the extent that it does not have been compensated for insurance or other compensation.

B) 3.2. Tax penalties and any other pecuniary penalties imposed on the concessionaire shall not be deductible as a result of faults committed by him.

B) 3.3 Negative balances in the profit or loss account for an exercise shall be attributable to those of the following financial years by the maximum annual amortisation fee of 25 per 100 authorised for the intangible asset.

B) 4. A depreciation fee for the depreciation, attrition or reduction of the value of tangible assets, of the asset for which the duration is greater than an economic year, in accordance with Article 47 (B).

B) 5. A fee for the depreciation of intangible investments and research expenditure on the permits and concessions in force, with the exception of the number 1 of this letter, in the form provided for in paragraph C (1) of the next item.

(B) 6.1 A repayment fee for intangible investments and research expenditure carried out on expired or expired permits and concessions, in the part that has not been amortised by application of the previous number, the quota to be calculated in the form laid down in Article 47 (C) (2).

B) 6.2 In order for this depreciation to be applied, it will be an essential condition that the expiry date has not been caused by legal infringement. In no case shall the depreciation of expenses and investments made prior to periods of inactivity exceeding five years be possible.

B) 6.3 Inactivity shall mean not being the holder of research permits or concessions of exploitation under the Law.

(B) 6.4 The costs incurred prior to obtaining the ownership of the research permits in accordance with the provisions of the Law shall not be depreciable unless it has been specifically authorised by the Directorate-General for Energy.

B) 7. A deduction of exhaustion factor from all areas of exploitation whose value for the respective financial year shall be, at the choice of the undertaking, any of the following two:

(a) 25 per 100 of the gross value of the hydrocarbons sold, as provided for in Article 59.

b) 40 per 100 of the tax base, calculated in accordance with the rules of this article, but without deducting the concept of exhaustion factor to which the present number refers.

Article 47.

For the purposes of applying the provisions of the previous Article, it shall be operated as follows:

A) 1. The costs and investments made during the lifetime of the research permits, including the area fee payable under the first scale of Article 44, shall be considered as deferred costs and, accordingly, accumulate in the accounts for each permit.

A) 2. In the same way, the new investments and expenditure carried out in research work, which shall be accounted for in separate accounts, shall be treated during the operating period, as referred to in the delimited as operating concessions or subsequent as research permits.

B) 1. The depreciation fees for the goods referred to in Article 46 (B) (B) shall be as follows:

B) 1.1. Buildings and infrastructure works:

15

15

infrastructure works related to an operating concession

		%
		15
8

B) 1.2 Fixed and specialised hydrocarbon exploitation facilities:

15

	%
Extraction installations	25
Recovery Facilities	25
25	15
Storage Facilities	15
12
Evacuation installations and pipes	20
	20
(except tower and substructure)	33
Tower and substructure	12
Platforms	12
Installations Hydrocarbon transport-specific by pipeline	10

B) 1.3. Tangible non-specific assets: Types applicable according to the General Tax on the Income of Companies and other Legal Entities.

(B) 2. In the event that the probable life of a deposit is less than the time required for the total depreciation of its facilities, the concessionaire may request from the Ministry of Finance depreciation higher than those indicated in this Article. The Ministry of Finance will decide to obtain prior report from the Ministry of Industry.

B) 3. The definitions of certain tangible assets are set out in Annex number 2 to this Regulation.

B) 4. For these quotas to be computable as expenditure, they must be accounted for and respond to the effective value of the goods to which they apply.

C) 1. Intangible investments and research expenditure shall be amortised by annual instalments which may not exceed 25 per 100 of the amount of such investments.

C) 2. The unamortized portion of the items referred to in the preceding number may be amortised by an annual fee of no more than 10 per 100.

C) 3.1. For the purposes of their depreciation in the form referred to in the two preceding paragraphs (C) (1) and (C) 2, intangible investments shall be considered.

C) 3.2. All investments and non-tangible expenses incurred during the lifetime of the research permits, including the accrual area fee, by companies that do not hold operating concessions. These non-tangible expenses and investments will be conceptualized as deferred costs, and will be accumulated in the accounts for each research permit, including such concepts as geological, geochemical, geophysical and expense works. intangible exploration surveys and expenditure on works for the access and preparation of the land and the location of such surveys and those of the same nature carried out, where appropriate, in the areas corresponding to operating authorisations if the were recognized as expenses.

C) 3.3. All investments and non-tangible expenditure, of the same research nature as those referred to in paragraph C) 3.2 above, and relating to those carried out by the holder of an operating concession in the research permits the holder, including the research permit for which the concession is derived.

C) 3.4. All investments and non-tangible expenditure, of the same research nature as those referred to in paragraph C) 3.2 of this Article and relating to those carried out by the holder of an operating concession in the area of the same, during the the time between the date of granting of the holding and the date of placing on commercial production of the field.

C) 3.5. All investments and non-tangible expenditure, of the same research nature as those referred to in paragraph C) 3.2 of this Article, and relating to those carried out by the holder of an operating concession in the area of the same and which are they refer to research work for the location and drilling of a structure capable of containing hydrocarbons, other than that contained in the field which gave rise to the granting of the holding.

C) 3.6. As intangible investments in a research permit or operating concession in force, and for the purposes of applying the rate of 25 per 100 in the appropriate time, all of those carried out on the surface shall be considered as permission was originally granted, or concession, i.e., without differentiating those that might correspond to the areas in which the original surfaces were reduced by extensions or waivers.

C) 4.1. They shall be considered as deductible expenses for the purposes of determining the tax base of the Company Tax, in addition to the normal expenditure on the exploitation of deposits, which are incurred, after the start of the commercial exploitation of the by intangible concepts of a nature similar to those referred to in paragraph C) 3.2 of this Article and which have the purpose of well-fitting operations, and in general the conservation of the field.

C) 4.2. However, the concessionaire may choose to consider these expenses as deferred costs and write down them in various financial years in the same way as intangible investments, if, in his view, the operations to which they gave rise benefit the for a period longer than one financial year.

D) 1. The amounts of the grant factor, as laid down in Article 7 (B) (7) of the preceding Article, shall be taken to a special account on the liabilities of the balance sheets with absolute separation and title appropriate, and all the funds in it accumulated will be invested by the concessionaire in the research activities that it develops in Spain as provided for in the Law, within five years.

(D) 2. Investments made in hydrocarbon research activities with the funds accumulated by the detraction as a factor of exhaustion shall be included in the balance sheet and the accounts of the concessionaire duly detailed and under a heading in which this circumstance appears.

D) 3. The obligation to make the investments referred to in the preceding two paragraphs is not considered to be fulfilled, if they are not invested in research expenditure, as defined in paragraphs (C) 3.2, (C) 3.3 and (C) 3.5 of this Article.

D) 4. The Ministry of Finance's Directorate-General for Tax Inspection, with the advice of the Ministry of Industry, will check the effectiveness and the investment nature of the funds from the exhaustion factor. In the event that any concept is not accepted as an applicable investment, the concessionaire shall have a period of one year from the date on which the final decision is taken to make the investments which he or she has failed to fulfil. obligation.

D) 5. If at any time and of course always at the end of the respective concession the amount accumulated in the said account was not necessary for the development of the research activities of the concessionaire in Spain, according to the Law and the the conditions of the award, which shall be transferred to the account of the results of the relevant financial year, for the purposes of their integration into the tax base, provided that the provisions of paragraph (A) of the Article previous.

Article 48.

1. In the event that several companies have the shared ownership of a research permit or an operating concession, the Income Tax of Companies and other Legal Entities shall be settled in each of the companies. (a) the partners, without being jointly and severally obliged to the public finances.

2. For these purposes, the result of the shared ownership shall be determined in accordance with Articles 45 to 47 of the Law and shall be attributed to each of the companies in proportion to their respective participation.

3. For the purposes of this Article, the revenue and expenditure corresponding to the operations carried out by the shared ownership shall be the subject of an accounting adjusted to the legal and independent provisions of the company However, when collecting in their books the operations which correspond to the shared ownership, they shall reflect in the relevant seats and in a clear manner the main data relating to the revenue and expenditure computed when determining that result.

4. The tax consequences of the possible modification of the percentages of participation during the shared ownership will be determined based on the data provided by the closed accounting on the date of effectiveness of the transfers and transfers.

5. For the purposes of this Article, the following rules shall be followed:

First.-The shared ownership of the permit or the concession as an economic unit shall apply the exemption provided for in Article 10.E of the recast of the General Tax on the Income of Societies and other Legal entities, approved by Decree 3359/1967, of 23 December,

Second. -The Income Tax of Companies and other Legal Entities shall be settled independently of each of the joint-unit companies which shall be taxed by the taxable amount, determined in accordance with the provisions of the the following paragraphs, resulting from all the activities of research, exploitation, transport, storage, purification and sale of hydrocarbons in which it participates.

Third.-To determine the gross result of the shared ownership, the concepts included in Article 48 (A) (a) and (b) shall be considered in the revenue. Deductible expenses shall be considered to be the concepts included in Article 46 (B) 1, 2 and 3 (B).

Fourth. Once the gross result of the shared ownership is determined in accordance with the preceding paragraph, each of the participating companies shall be attributed to each of the participating companies.

Fifth. -To determine your taxable base each unit member will consider:

(a) For the purposes of the holding operations under exclusive ownership: in the revenue, the concepts contained in Article 46 (A) (a) and (b), and between the expenditure, the concepts included in the epigraps 1, 2 and 3 of paragraph B) of that Article.

(b) For the holding operations under shared ownership: the gross results that have been attributed to it in accordance with paragraph 4. of this Article and those income and expenses that are specific to the participant and come under the rules of the General Tax on the Income of Societies and other Legal Entities and those contained in the Law and in this Regulation.

c) For both exclusive and shared entitlement operations:

c1) The amounts transferred from the exhaustion factor account to the results.

c2) The amortization fees of your tangible and intangible assets within the meaning of Article 46 (b), 4, 5 and 6 (b) that come by application of the rules contained in the Act and this Regulation,

c3) Deduction per exhaustion factor as appropriate.

Sixth. -Negative balances in the profit or loss account of the undertaking in question for an economic year shall be attributable to those of successive financial years in the manner provided for in Article 46 (B) 3.3.

Seventh. -As for the deduction by exhaustion factor, the company may opt for either of the two forms provided for in Article 46 (B) 7 of the Law and this Regulation. If the form referred to in point (a) of that paragraph is taken, the gross value of the hydrocarbons sold shall be determined by the sum of the values of the sold of their concessions under exclusive ownership and the shares which correspond to the sales of the concessions under shared ownership. If Article 46 (B) (7) (b) (b) is to be applied, the tax base to be quoted shall be that which is specifically obtained by the undertaking concerned by application of the preceding paragraphs, but without deducting the concept of the exhaustion to which this number refers. If the undertaking shall apply the deduction as a factor of exhaustion, the rules laid down in Article 47 (D) shall apply to it.

Eighth. -1. In the case of a change in the unit-holders or the percentages existing in a holding concession under a shared ownership scheme, the acquirers of the shares/units shall be deemed to be subrogated to all the rights and obligations of the same.

Eighth. -2. Consequently, each of the companies acquiring the percentages transferred and each of the transferors of those percentages will be assigned the share corresponding to these percentages of participation, in the result of the ownership shared, which shall be effected in each case in proportion to the time during which each company has held the ownership of each share which is the subject of the transfer, or in another form provided for in the contract of sale, approved by the Administration, before its effectiveness. The amounts thus attributed to each company, increased, where appropriate, in the part of the result attributed to each of the shares in its ownership, which have not been the subject of a transaction, shall constitute the basis for the settlement of the imposed on each company.

Eighth. -3. For these purposes, shared ownership shall take into account such circumstances, at the time of accounting for their items, in the form specified in paragraph 3 of this Article.

Article 49.

1. The tax rate of the General Tax on the Income of Companies and other Legal Entities shall be 40 per 100.

2.1. The amount of the settlement fee shall be deducted from the sum of the amounts which the undertaking has paid to the State as a fee for the granting of the holding for the financial year.

2.2. In the case of shared ownership, the fee shall be attributed to each company in proportion to their respective shares.

3. The amount of this fee shall be of a minimum fee, without, where it is higher than that of the Company Tax, the excess may be deducted from the following financial years.

Article 50.

1. Investments made during the period of Spanish administration in the territories of the Sahara and its waters and continental shelf shall be considered to be carried out in a Spanish province, for the purposes of its eventual depreciation.

Article 51.

1. For the purposes of the tax provisions laid down in the Law, companies whose object is exclusively the investigation and exploitation of hydrocarbons shall be exempt from the following taxes:

The Rustic and Pecuaria Territorial Contribution and the Urban Territorial Contribution, for goods that are directly affected by the investigation or exploitation of hydrocarbons.  Notwithstanding the provisions of Article 57.1 of the General Tax Law and Article 57 of the recast of the Income Tax of Societies and other Legal Entities, the tax quotas exempt from these contributions are not deducted from that of the Company Tax for the purpose of determining the tax liability corresponding to this Tax.

2. The following rules shall apply in relation to the Capital Income Tax:

(a) The dividends distributed by the companies with a profit corresponding to the activities of the research and exploitation of hydrocarbons referred to in the Law shall be exempt.

(b) The tax shall not apply in the cases referred to in Article 4 (2) of its recast text.

(c) The interest of the obligations to be issued by undertakings shall be waived, provided that the funds thus obtained are intended to invest in research and exploitation of hydrocarbons.

(d) The provisions of Article 19 (2) (b) of the recast text approved by Decree 3357/1967 of 23 December 1967 shall also apply to the loans granted by the Spanish parent companies to their subsidiaries.

3. These companies shall be exempt from the General Tax on Proprietary Transmissions and Documented Legal Acts in respect of:

1. The constitution, increase or decrease in capital; the extension, modification, transformation and dissolution of the companies, and the adjudications of goods and rights of all kinds in payment of debts or their assumption or for payment of the costs incurred as a result of these acts.

2. The administrative concessions granted under the Law and the acquisitions of goods whose purpose or destination is the investigation of hydrocarbons, as well as transfers of permits and concessions.

3. The constitution, modification, renewal, express extension, transmission and extinction of loans, whatever their nature and class, including those represented by the issuance of obligations to finance the activity of the reference companies.

4.1. Exemption from the General Tax on the Traffic in Enterprises of the sales, transmission and deliveries of crude oil made by the dealers themselves for the production of petroleum products destined for the Monopoly of Petroleos.

4.2. The export of these products will benefit from the export tax relief, which will be applied according to the current tariffs, without in any case being lower than the rate corresponding to the General Tax on the Companies that have been paid for such a concept.

5. The reference companies shall be exempt from the provincial or municipal taxes that fall on the income or on capital.

6.1. The companies holding the research permits and operating concessions or the contractors used by them, may import, with exemption from customs duties and the General Tax on the Traffic of Enterprises the materials, machinery and equipment necessary for the operations to which the Law refers, as soon as it is not possible to obtain them in Spain under satisfactory conditions of quality, delivery time and price, in the judgment of the Ministry of Industry. To enjoy this benefit, the corresponding authorization from the Ministry of Finance must be obtained and obtained.

6.2. In the case of temporary imports, the Ministry of Industry shall set out the certification referred to in the preceding paragraph, the period for re-export and the period of the Treasury, the guarantee to be provided.

6.3. These imports of equipment, machinery and equipment shall have all the preferential effects; to this end, in cases of urgency, the customs office of entry shall issue provisional passes, which within 45 days shall be replaced by those that correspond, dealt with in accordance with the above paragraphs.

Item 52.

1. Activities relating to refining and any other activities other than research, exploitation, transport, storage, purification and sale of extracted hydrocarbons shall be subject to the general tax regime.

Article 53.

1.1. Companies whose social object does not exclusively provide for the investigation and exploitation of hydrocarbons shall be governed by the following rules:

1.2. For the purposes of the General Tax on the Income of Companies and other Legal Entities, the following shall be considered as deductible expenses, in addition to those arising under the general rules of the said tax:

(a) The amounts due on the basis of charges-excluding the area fees-or any indirect tax that the company is not exempt under the Act.

(b) A depreciation fee for depreciation, attrition or reduction of the value of the tangible assets of the asset, the duration of which is higher than an economic year, in accordance with the provisions of paragraph (B) of the Article 47.

(c) A fee for the depreciation of intangible investments and research expenditure on the permits in force, with the exception of Article 46 (B) (1), and in the form provided for in the number 1 in Article 47 (C).

(d) A fee for the depreciation of intangible investments and research costs incurred in expired or extinguished permits, in the part that has not been amortised by application of the previous paragraph, which shall be calculated in the manner laid down in Article 47 (C) (2).

1.3. In order for this depreciation to be applied, it will be essential that the expiry date has not been caused by legal infringement. In no case shall the depreciation of expenses and investments made prior to periods of inactivity exceeding five years be possible.

2. Exemption from the General Tax on Proprietary Transmissions and Legal Acts Documented with respect to the acquisitions of goods the destination of which is the investigation or exploitation of hydrocarbons.

3. Exemption from the Tax on the Income of the Capital from the interest of obligations paid by companies holding research permits or operating concessions, provided that the funds thus obtained are intended to make investments in research or exploitation of hydrocarbons.

4.1. Exemption from customs duties and the General Tax on Traffic in Enterprises under the terms of Article 51 (6).

4.2. In the event that several companies have the shared ownership of a research permit or an operating concession, the exemptions and bonuses shall be settled on each of them in proportion to their respective participation.

4.3. For this purpose, the revenue and expenditure relating to operations carried out by companies whose object is not solely and exclusively the investigation and exploitation of oil, in the case of shared ownership and in the case of Exclusive ownership shall be the subject of an accounting adjusted to the legal and independent provisions of the other activities.

5. The independent accounts referred to in paragraph 4 above shall affect the operations of research, exploitation, transport, storage, purification and sale of hydrocarbons.

6. The companies referred to in this Article may not make the deduction as a factor of exhaustion referred to in Article 48 (B) 7

7. The unamortised part of the intangible investments and research expenditure of the companies governed by this Article may be the subject of depreciation from income from other activities of the company, other than those of research, exploitation, transport, storage, purification and sale of extracted hydrocarbons, provided that the total of depreciation quotas practised in an economic year in addition to those resulting from revenue from activities included in the Law and those activities that reduce the income of other activities not included in the the same, do not exceed the maximum authorised in each case by the provisions of the Law and this Regulation, and which do not affect periods of inactivity of oil research or exploitation exceeding five years.

8. Companies whose social object does not exclusively provide for the investigation and exploitation of hydrocarbons shall be obliged to submit statements of the results of such research and exploitation carried out in accordance with the the rules of the General Tax on the Income of Societies and other Legal Entities, in the form and time limits laid down therein, in addition to the special provisions laid down in the Law and in this Regulation.

9. The taxable amount determined in accordance with paragraphs 5 and 6 of this Article shall be settled at the rate of 40 per 100 laid down by the Act.

Article 54.

1. In the part of its activity governed by the Law, the tax system established in the previous article shall apply to companies which, by way of exception, do not provide for the investigation or exploitation of hydrocarbons in their social object. authorised by the Government to carry out these operations.

Article 55.

1. The activities of the research or exploitation of hydrocarbons carried out by the companies referred to in the two preceding articles may not benefit from any bonus, exertion or reduction not provided for in the Law and this Regulation.

Article 56.

1.1. In order to avoid the undue application of the tax deduction for expenditure referred to in Article 47 (B), the Government shall require mergers or removals and transfers of the assets of companies which it carries out. activities covered by the Act and this Regulation.

1.2. To this effect, the interested parties shall request the authorization of the Ministry of Finance, which, in the light of the mandatory report of the Ministry of Industry, will dictate the appropriate resolution.

CHAPTER VI

Of the additional rights and obligations of holders of research permits and operating concessions

Article 57.

1.1. The holder of the research permits or concessions of exploitation, may benefit from the benefits of forced expropriation, temporary occupation or easements of passage on the precise grounds for the placement of the tasks, installations and services to the extent necessary to initiate the development of their activities and the full use of the deposits of liquid or gaseous hydrocarbons, in accordance with the provisions of the Law and this Regulation and subsidiary in the Law of Forced Expropriation.

1.2. In the event that the instruction of cases of forced expropriation, temporary occupation or easement of passage is accurate, it will not be taken into account for the calculation of the duration of the permits or concessions that are indicated in the Articles 14 and 29, the time between the initiation of the file and the taking of ownership of the buildings.

Article 58.

1. The concessionaires are obliged to supply, in proportion to their respective production, the hydrocarbons which, in the Government's opinion, are required for domestic consumption, either in their original state, such as crude oil, gas and gasoline. natural, or in the form of derivatives from other industrial processes, and may only export surpluses, prior to the appropriate checks.

2. For the purposes of the preceding paragraph, the pro rata of the production shall be determined, where appropriate, taking into account the different qualities of crude.

3. The National Fuel Commission, under the Ministry of Industry, will be the body responsible for studying the distribution of the quotas referred to in the previous paragraph and raising the corresponding motion for a resolution, to the Government. The Commission shall formulate the programme of oil supplies to the national refineries and other industrial factories in line with the national fuel plan.

Article 59.

1.1. The Government shall, on a regular basis, fix the price for crude oil and gases, in the light of the quotations of similar types of hydrocarbons on the world market.

1.2. For the determination of this price, a Commission consisting of the Director General of Energy, who will act as President and as Vocals: the Subdirector-General of Fuels, the Deputy Director General of Energy Planning, is constituted. Head of the Unit described in Article 70, two representatives of the Ministry of Finance, one from the Ministry of Commerce and one from the Technical Secretariat of the Ministry of Industry. As Secretary the Head of Unit will act.

1.3. For the assessment of prices, the Commission shall take into account the international contributions of other similar types of oil, the 'bona fides' offers which may be credited, the product concerned, the costs of transport up to the refineries or points of consumption and how many other circumstances affect the hydrocarbon concerned, and shall also request a report from the relevant indicated.

1.4. The Commission will raise the relevant proposal for its resolution by ministerial order to the Minister of Industry, following the agreement of the Council of Ministers.

2. Those prices shall be those applied for the determination of the taxable amount laid down in Article 45 (2) and for the payment, to be made in pesetas, of the hydrocarbons supplied to the domestic market, as a result of the provisions of the previous article.

Article 60.

1. The holders of operating concessions may, after the provisions laid down in the Law and the conditions of the respective concessions, export the surplus of the crude or refined hydrocarbons obtained from their holdings or sell them to Spanish companies for export in the raw or after processing.

2. To this end, dealers must be interested in the timely certification of the Ministry of Industry, before submitting the corresponding export permit applications in the Ministry of Commerce, which will be granted without tax. by this concept, in accordance with the provisions of the second subparagraph of Article 51 (4) of the Law.

CHAPTER VII

From authority and jurisdiction

Article 61.

1. Holders of authorizations, permits or concessions are subject, without restrictions, to Spanish Laws and Courts.

Article 62.

1. It is up to the Ministry of Industry to inspect all the work and activities covered by the Law to check compliance with the obligations of the Law and this Regulation.

2.1. It may also inspect its accounts and exercise all the inspection and audit actions entrusted to it by the Law and this Regulation, in particular to monitor compliance with the mandatory legal rules in the fiscal, social and labour issues.

2.2. In order to carry out such actions, the Ministry of Industry may, at any time, request the documents and invoices it requires in each case, as well as carry out the inspection of the work and its accounting. The fees laid down in the provisions in force on the matter shall apply to these actions.

Article 63.

1. All files dealt with under the law and this Regulation shall be instructed and resolved by the Ministry of Industry or by the Council of Ministers, in cases where this is provided for.

Article 64.

1. Decisions that end the administrative route shall be subject to the administrative procedure, in accordance with its special law.

Article 65.

1. The intervention of the courts of ordinary jurisdiction in matters of a civil or criminal nature attributed to their competence, will not interrupt the administrative processing of the files, nor the continuity of the works, as well as the exercise of the management or inspection functions of the Administration.

2. Where the courts have ruled on the seizure of farm products, if it were a matter of hydrocarbons which are legally required to be put at the disposal of the State, the amount which the official valuation of the products must bear shall be taken on board. the extent to which their delivery is carried out.

Article 66.

1. Without prejudice to the functions and powers conferred on the Labour Inspectorate by the provisions in force, no administrative authority other than the Ministry of Industry may suspend the works covered by the Law and the present Regulation.

2.1. It is up to the Ministry of Industry, hearing the Department's Board of Governors, to suspend temporary or permanent work.

2.2. The Directorate-General for Energy may also have a temporary suspension of the work, to mediate an urgent reason, giving the Minister of Industry an account.

2.3. For reasons of urgency involving danger to persons, public or private property or serious environmental pollution, the Provincial Delegations of the Ministry of Industry may order the temporary suspension of the activities that cause the risk.

2.4. Ordered the suspension of the work, the Provincial Delegation of the Ministry of Industry will put it to the attention of the Directorate General of the Energy, informing of the facts that have motivated it, of the period that it proposes and conditions that come to maintain or lift the suspension. If it does not proceed, the Directorate-General for Energy shall lift it within a maximum of 15 days from the order of suspension. Otherwise it will raise the proposal to the Minister of Industry for the resolution that comes.

2.5. The suspension of work shall be ordered without prejudice to the recognition of the economic and labour rights which may correspond to the staff concerned.

2.6. The processing of the file to be carried out shall always be carried out with an audience of the interested parties.

3. Where the suspension of work is agreed on grounds not attributable to the holder, the authorisation, permit or grant shall be extended by the time limit.

4. The resolution will be brought before the Council of Ministers.

Article 67.

1. The Ministry of Labor, in charge of monitoring compliance with the social laws, will intervene through its technical bodies, in the hydrocarbon and derivative establishments, in the form recorded by the laws, with the (i) limiting, in respect of the former, the prevention of accidents and occupational diseases, as well as the exact observance of the safety and hygiene rules at work, the task of which will be the sole responsibility of the competent bodies of the Ministry of Industry.

Article 68.

1. It is for the Ministry of Finance to carry out the provisions of the Law and this Regulation in the tax and tax matters, by means of its technical bodies, the necessary inspections for the development of the functions that they are their own and, seeking from the Ministry of Industry, information relating to the research or exploitation work carried out, the presumed costs thereof, equipment used and how much data is estimated to be useful for tax purposes and tributaries.

Article 69.

1. It is up to the Ministry of Industry, through the Directorate-General for Energy, to inspect and monitor all the works covered by the Law and this Regulation, without prejudice to the powers of the Ministry of Labour and other agencies of the State Administration, trust the legislation in force.

Item 70.

1. For the purposes of the preceding Article, the processing of files falling within the scope of the Law and this Regulation shall be carried out by the Directorate-General for Energy, which shall, for this purpose, have the appropriate Administrative Unit. It shall be provided with the necessary registration books and in particular the special registers set out in Article 22, receive the documentation provided for in this Regulation, instruct the dossiers, monitor the work and, if appropriate, propose the resolutions it deems appropriate.

Article 71.

1. By the special characteristics of zone C, the activities in it, will be regulated by the Law and this Regulation, by the legislation in force on coasts and by the agreements contained in the instruments of accession of Spain to the International conventions on the territorial sea and the continental shelf.

2. It is up to the Ministry of Industry, the management and protection of the hydrocarbon fields to refer to Article 1 of the Law, which is contained in the subsoil of zone C. All the files relating to the authorisations, permits, concessions and facilities to be carried out in the same, shall be processed by the Ministry of Industry. To this end, the Directorate-General for Energy shall obtain a report from the Ministries concerned, within the competence of the Ministries concerned and recognised, which shall submit their report within 10 days.

CHAPTER VIII

From nullability, ineffectiveness, expiration, and extinction

Article 72.

1.1. They are nullable:

First. -The authorizations, permits and concessions granted under the Law in case of lack of suitability of their holders.

Second. -Permits and concessions that overlap others already granted, but only in the overlapping extension, when the remaining area is sufficient to meet the conditions required in Articles 16 and 34.

Third. -Acquired permits and concessions contravening the provisions of the Act.

1.2. In the event that, in the judgment of the Administration, there is no bad faith on the part of the holders, the latter shall impose the precise conditions for such permits or concessions to comply with the provisions of the Law and this Regulation.

2. There will be no effect:

First. -Authorisations, permits and concessions whose holders seriously infringe the rules of the Law and this Regulation or the obligations imposed on them.

Second. -Permits and concessions transmitted to companies that do not meet the conditions set out in the Law.

Third. -Permits and concessions the holder of which does not make the payment of the surface charge.

Fourth. -Transmissions to be carried out without the authorization required by Article 10 of the Law.

3.1. Where the Administration, by itself or at the request of a party, presumes the existence of any of the vices referred to in this Article, the Directorate of Energy shall initiate the file by collecting, in the light of the information available and carrying out the Investigations that you consider relevant.

3.2. Once the previous steps have been completed, the holder (s) concerned shall be required to appear legally authorised by the representatives or by the representatives in order to give them a view of the file. They shall be required to do so within a period of not less than 10 days and not more than 15 days before they provide evidence that they are in defence of their rights.

3.3. Failure to appear in this act or failure to provide evidence of discharge within the prescribed period shall not prevent the continuation of the file.

3.4. If, as a result of the action taken, the alleged vices of the Directorate-General of Energy will not be present, the case will be dismissed.

3.5. If, in the case of the Administration, the existence of subsable legal defects be demonstrated in the permits or concessions that are the subject of the file, the non-existence of bad faith on the part of the beneficiaries, the Directorate General of Energy will decide on the precise conditions so that permits or concessions, or transfers of them, conform to the precepts of the Law.

3.6 If the existence of bad faith or non-subsable vice is proven, the Directorate General of Energy will propose the cancellation of the permit or concession concerned.

3.7. In any of the three cases, the Directorate-General for Energy shall finalise the dossier within 60 days from the expiry of the above mentioned, and shall agree to its withdrawal or to raise a motion for a resolution. the Minister of Industry to submit it for approval by the Council of Ministers.

3.8. Where the case for annulment is initiated as a result of the causes referred to in the first paragraph of Article 2 (1), the Administration shall, within 30 days, verify whether the overlapping part of the case may be segregated the remainder meets the minimum area conditions laid down in the Law, or if, on the contrary, it is not possible to do so because there is not enough area in the rest. In either case, the Directorate-General for Energy, which has been carried out in such a way, shall raise its proposal within 20 days of the Minister for Industry's approval, in order for it to be submitted to the Council of Ministers.

3.9. In the cases referred to in points 1, 2, 2 and 4. of paragraph 2 of this Article, the same shall apply in the same way as that laid down in paragraph 3 above. However, if in the case provided for in point 1. above, the non-compliance with the minimum obligations of investments committed in the research permits, and the amount exceeding the amount of the guarantee, shall be carried out against that and the Director General of Energy will have the income of the difference in the Treasury. If this income is not made, and without prejudice to the relevant legal actions, the non-compliance will be published in the "Official Gazette of the State", indicating the disabling of the holder or the holders, in order to obtain new permits.

Article 73.

1.1 Authorizations, permissions, and concessions are extinguished:

a) For expiration of the expiration of your time limits and for any other legally anticipated cause.

(b) By way of resignation, the holder shall, in whole or in part, once fulfilled the conditions under which they were granted.

c) For any other causes established by the Laws.

1.2. The holder within 60 days from the expiry of the initial period of validity of a permit for the investigation or the granting of the holding or, where appropriate, of the term of the extensions granted, shall prove to the Directorate-General of the Energy which has complied with all obligations arising from the grant. To this end, it will present, for each of the permits-or group of adjacent permits, with identity of participation of the holders, vigencies and obligations-, a memory with the following data:

First.-Statistics according to years of validity, of the work done in geology, geophysics, drilling and production, with the corresponding detail to seismic lines, number of gravimetric stations, geochemical, or magnetometric, probes performed and metros drilled.

Second. -Full study of the results obtained, with the compilation of the most up-to-date version of the geological documents, paleontological, geophysical, drilling and production reports, as well as the seismic sections, diagraisies, poll tokens, and production tests.

Third.-Accounting analysis, for years of validity, of investments made, segregated according to the concepts of geology, geophysics, drilling, production and general expenses. The surface cannons shall not be computable for the fulfilment of the obligations. Nor shall they be carried out before the permits are obtained, unless they have been specifically authorised by the Directorate-General for Energy.

Fourth. -Justicizers of the payment of the surface charge for any period of validity before extinction or renunciation.

1.3. The Directorate-General for Energy shall carry out the checks it considers relevant for the purpose of inspecting or requesting evidence of technical supporting documents, invoices or evidence of operations carried out during the course of the accredited period.

1.4. If the Administration considers that the information provided is unsatisfactory, it shall require the holder to remedy the deficiencies within one month, under the warning of a penalty.

1.5. In order to verify compliance with the obligations, the Directorate General of Energy, within ninety days will raise the Minister of Industry with proposed extinction and return of the guarantees.

1.6. If the checks carried out result in the failure to comply with obligations, the Directorate-General for Energy shall, within 20 days, give a decision imposing the entry into the Treasury of the uninvested difference. Justified the compliance with the presentation to the Administration of the proof of income in the Treasury, within twenty days, the Directorate General of the Energy, will raise to the Minister of Industry proposal declaring the extinguishing and ordering the return of the warranties.

1.7. In the event that the holder does not provide the documentation referred to in paragraph 1.3, it shall be understood that there is a breach of the obligations imposed by the Law which will entail the loss of the guarantee. Without prejudice to this, the Administration shall, within 60 days, draw up its study of the fulfilment of the obligations with the information at its disposal. If it is apparent that the failure to comply with the obligations exceeds the value of the guarantee, the Director-General shall propose to proceed against the guarantee and order the entry into the Treasury of the uninvested difference.

1.8. If the decision of the Director General of the Energy of Income in the Treasury is not fulfilled, without prejudice to the legal actions that correspond, the non-compliance will be published in the "Official Gazette of the State" and will be recorded in the file of the holder, disabling it for granting new permissions.

1.9. The holder of a permit for investigation or a concession of exploitation may, in part or in full, waive the permit or grant at any time of its term of validity, in accordance with the following conditions:

(a) The request for partial waiver of a permit for research or exploitation shall be submitted by the holder or his representative, with sufficient power for his purposes, in the Directorate-General for Energy, and be accompanied by:

First. -Plan at scale 1:50,000 in zone A and 100,000 in zone C of the primitive permit or concession, on which the part that is to be abandoned and the one that is to be preserved, that must be constituted by, will be clearly indicated. the grouping of one-minute-side geographical quadrillaters that form a continuous area and have at least one common side.

Second. -Justification that the petitioner has fulfilled until the moment of the request for resignation and for the whole of the area granted, the totality of its obligations. To do so, it will present the Memory described in section 1.2 of this article. If he has not fulfilled the minimum of his commitments at the time of the request for partial resignation, and without this the exemption from the presentation of the above mentioned Memory, the holder will be obliged to accumulate the investments not made to those he has to perform on the part that they retain and to develop the rest of their obligations.

(b) In the case of the total waiver of a permit for investigation or grant of exploitation, the application, which shall be submitted in the same manner as referred to in point (a) above, shall be accompanied by the Memory described in the paragraph 1.2 of this article, following the processing provided for in 1.3 to 1.8.

(c) In giving up, in whole or in part, to a permit for research or concession of exploitation, the facilities and stable works that are within the perimeter of the renounced zone shall be at the State's benefit. In the case of operating concessions, they must be delivered in such a way that the production in the area renounced is not interrupted by abandonment.

d) Within 60 days of the submission of the request for waiver, the Directorate-General for Energy shall check whether the holder has complied with all the conditions imposed by the foregoing paragraphs and shall decide on the adoption of the of the measures deemed appropriate, or, where appropriate, shall be proposed by the Minister for Industry.

2. When a permit or concession is extinguished, the security referred to in Articles 23 and 35 or the part corresponding to the partial extinction shall be returned to its holder, which shall be effected within 20 days of the date of the decision. ministerial.

Article 74.

1. In the case of the absence of a concession pursuant to Article 72 (2), the provisions of Article 37 (1) shall apply.

Article 75.

1. Where the applicant is responsible for the processing of a file for three consecutive months, the application shall be withdrawn and, in the case of a permit for the investigation or the granting of the holding, as from their carry-overs, the holder shall, in favour of the State, lose the security deposit provided for in Article 23.

Article 76.

1. The annulment and the deprivation of effectiveness of the authorizations, permits and concessions referred to in Article 72 shall be declared by Decree, on a proposal from the Ministry of Industry.

Article 77.

1. They will revert to the state the cancelled, expired or expired permits and concessions.

2. If, within six months of its reversal, the State does not award its award to a tender or, under Article 4 (1), does not exercise the powers to continue the investigation or exploitation itself, it shall be deemed to be Frank and recordable.

Article 78.

1. Where an operating concession is extinguished by the expiry of its period and is the subject of a tender for its subsequent award, it shall be given preference to acquire, on an equal footing, the concessionaire.

Article 79.

1. The provisions of this Chapter shall be without prejudice to the general provisions of the Law on Administrative Procedure.

CHAPTER IX

From Sanctions

Item 80.

1.1. The infringement of the provisions of the Law and of this Regulation which does not give rise to a declaration of annulment or ineffectiveness or extinction, as well as the failure to comply with the requirements or conditions imposed by the competent bodies of the Ministry Industry will be sanctioned with a fine of 5,000 to 5,000,000 pesetas, in the form and amount that is established here and regardless of the possible suspension of the works.

1.2. The penalties will be imposed:

(a) By the Provincial Delegate, when the amount of the penalty is between 5,000 and 50,000 pesetas.

b) By the Director General of Energy, up to the amount of 250,000 pesetas.

(c) By the Ministry of Industry, where the amount does not exceed 1,000,000 pesetas.

(d) By the Council of Ministers, on a proposal from the Industry when its amount exceeds 1,000,000 pesetas.

1.3. In order to determine the amount of the fine to be imposed, the following circumstances shall be taken into account:

a) Nature of the violation.

(b) Perjudgment that the infringement may result in the management of the industry, the field, the goods of third parties, the contamination of the environment and the proper information of the Ministry of Industry.

c) Reoffending a violation.

d) Reiteration of violations.

1.4. If the fine is not satisfied within one month, the security shall be lodged, where the amount of the security is sufficient to cover the penalty imposed, the provisions of Article 24 (3) being applied.

1.5. Where the security provided is insufficient, the penalty shall be charged and, if there is no recovery, the guarantee shall be lodged and the permit shall be without effect.

1.6. The fine can be imposed regardless of the possible suspension of the work by the Ministry of Industry, and, in the act in which it is agreed, the time limit shall be indicated in which the cause which has given rise to the fine must be corrected. In the event that no such correction is made within the prescribed period, the Administration may make it, in the alternative, from the person concerned.

1.7. Penalties for fines shall be imposed on the instruction of the file to be processed in accordance with the provisions of Chapter II of Title VI of the Law on Administrative Procedure.

2. In the event of repeated or repeated repetition, the amount of the fine may be increased to more than double the limit, in each case.

3. The Minister of Industry may use sanctions against sanctions imposed by the Minister of Industry and shall be brought before the Council of Ministers, and against those issued by the Council, in order to replace them.

4. The above will not apply in the following cases:

First. -In the tax violations that may be committed, which shall be governed by the provisions of the General Tax Law of December 28, 1963 and supplementary provisions.

Second.-In the case of pollution of the marine, terrestrial or air environment, to which the corresponding specific provisions will apply.

Article 81.

1. Where, due to serious negligence or abandonment of the holder, substances referred to in the Law and this Regulation are wasted, the holder shall pay the corresponding fine and the lost hydrocarbons shall be computed for the purposes of fixing the tax base. set out in Article 46 (A).

2.1. The dumping of solid or liquid hydrocarbons or water, or of mixtures of hydrocarbons susceptible to public health, as well as the flora and fauna or the economy of the region, is prohibited.

2.2. The resulting evacuations directly from the operations covered by the Act should be exempt from hydrocarbons or other pollutants in concentration that pose a risk.

2.3. Maximum concentrations of hydrocarbons which may be discharged to land, sea, rivers or the environment as a direct result of exploration, research or exploitation operations, including storage, shall be subject to the provisions which are in force at any time in relation to the protection and conservation of the environment.

Article 82.

1. The penalties laid down in the Act and this Regulation shall apply without prejudice to those imposed by other laws or regulations and the civil and criminal actions to be imposed.

TRANSIENT PROVISIONS

First.

1. Foreign entities with a branch established in Spain, in accordance with Article 8 of the Law of 26 December 1958 and Article 16 of the Regulation of 12 June 1959, which on 27 June 1974 were holders of permits to (a) the right to continue to act through the said branches in all the entitlements held in the indexed date, to apply for new permits and concessions and to repatriate their benefits and investments in accordance with the provisions of Article 7 of this Regulation.

2. In the event of the conversion of foreign companies into Spanish companies, this does not mean any alteration of the rights and obligations affecting the branch. In this case, the public limited liability company will have to assume all the rights and obligations that would correspond to the branch.

3. The conversion of the branch of the foreign company referred to in the preceding paragraph into a Spanish public limited company shall be exempt from tax in accordance with Article 51 (3) of the Law and this Regulation.

Second.

1. Companies having permits or concessions granted under the Law of 26 December 1958 and which have not submitted a written statement of their wish to continue to be subject to the provisions of the Law, according to the provision Second of the Law of 27 June 1974, they shall automatically be governed by this Regulation and by this Regulation.

2. However, the commitments of investments, works and obligations of the holders at the date of publication of this Regulation will remain unchanged during the current period of validity of the old law, or until such time as the companies submit a request for grant or extension, in which case, to access the defendant, the permits or concessions affected by the application will have to be accommodated to the specifications of the new Law and Regulation, from the day of the resolution,

3. In particular they shall not apply during the period referred to in the preceding paragraph:

(a) The new minimum investment obligations that this Regulation establishes, (This provision will also apply to the permits granted in the interval since the enactment of Law 21/1974 to that of the Regulation.)

b) The waiver of the 30 per 100 of the area that for zone C has the Law, after the initial two years.

4. As regards zone C, if the holder wishes to follow the investigation, after the first six years provided for in the old law, he shall request a special extension or regularisation, for two years with a reduction of 30 per 100 surface area and minimum investment obligation of 150 pesetas per hectare per year. This will follow the procedure laid down in Article 14 (3) of this Regulation. After this period of equalization with the new law, if the holder wishes to prolong the investigation, it will be necessary to request the normal extension or first-for three years-that the Law for zone C, with a new reduction of 20 per 100 of the original area of the permit and minimum investment of 600 pesetas per hectare per year. In addition, those holders of zone C who are in the enjoyment of the first extension, if they request a further extension of the permit at the end of the ninth year, as provided for in the old Law, the extension of equalization will be for only two years, with A further reduction of 25 per 100 from the original area and 600 pesetas of minimum investment per hectare per year.

Third.

1. The files which are in the process of entry into force of this Regulation will continue to be instructed, in accordance with the provisions laid down in the Regulation of 12 June 1959, as long as they do not object to the Law of 27 June from 1974.

2. Once the processing of the dossiers has been completed, the provisions laid down in this Regulation shall apply to them.

Fourth.

The guarantees constituted before the entry into force of the Law will continue to be considered valid until the moment they have to be modified, due to extensions, disposals or conversions in concessions. In these cases they shall be renewed for the amounts corresponding to 25 pesetas per hectare.

Fifth.

The permits granted with lengths referred to the Madrid meridian will continue to be governed by the same meridian for the duration, for the purposes of reductions, waivers or conversions of concessions, to be formulated by integer minutes of length.

FINAL, ADDITIONAL, AND REPEAL PROVISIONS

First.

1. In application of the Law, the reserve in favor of the State, established under Article 78 of the Law of 26 December 1958 and its areas are considered free and registrable.

2. The State reserves existing at the date of enactment of the Act, consisting of areas of zone A) and zone C, sub-areas a), b) and c), which came from research permits of cancelled, expired or extinct hydrocarbons, as well as the segregated research permits from which no exploitation was derived, lost their status as state reserves and became free and recordable areas.

3. The segregated areas of the research permits from which the exploitation was derived are also declared free and registrable.

Second.

The Mining Law will be a substitute for this Law in everything that is not specially regulated in it. The Regulation for the implementation of the Mining Act shall also be supplementary to this Regulation.

Third.

As many precepts, contained in non-law provisions, are repealed, they shall be contrary to the provisions of this Regulation.

Fourth.

This Regulation shall enter into force on the day following that of its publication in the Official Gazette of the State.

ANNEX NUMBER 1

Poll Summary Tab

(Article 35 (13))

	tab	Probe name
		exploration	--	ASSESSMENT		DEVELOPMENT

Company	National map sheet
Operator	Province
	Locality
Official permission number (published in the "B.O.E.")	Type of trap
selected by means of

Coordinates:
	Length	Madrid
			Length	Greenwich

Elevation (1)

Soil

Drag Buje

Table of rotation

Contractor

Drilling
Date of start	Final depth
Date of completion	Horizon reached

Entubados

	Length, in meters		diameters, in mm. or in.
	.................... .		............................ .
	........................ .		............................ .
	........................ .		............................ .

:

Productive ❑

Abandoned ❑

Suspended ❑

tests:

In the interval	through the variance	Long duration

seismic velocity study:

By ❑points

Continuous ❑

Iofm with ❑Calage

ELECTRICAL RECORDS

Scale:

Scale:

(1) Metres above sea level.

Training or age

	Roof (2)		Power		Short Litological

Interval	Witness Class		Brief lithological
	Normal	Lateral

DATA ABOUT TESTS

Interv.

density

	Fluid				Obt.	density		Flow		Salinity		Porosity		Permeab.		Pressions
	(3)				(5)				(7)				(9)		(10)		(11)		(12)

(2) Roof in meters, relative to reference level. Reference level .............

(3) Interval in ms.

(4) Nature.

(5) gr/cm³.

(6) Obturator mm³.

(7) l/minute.

(8) ppm salt in water.

(9) In%.

(10) Avg Permeability. in milidarcys.

(11) Virgin and fluence pressure.

(12) Gas, oil.

ANNEX NUMBER 2

Tangible Asset Definitions

FIXED AND SPECIALIZED HYDROCARBON EXPLOITATION FACILITIES

These facilities are complex and specialized fixed units, made up of elements, which, although separable by nature, are technically indispensable for their operation. The incorporation of the elements into the unit justifies the allocation to the set of a single percentage of amortization.

The classification criterion is the irreversibility of the incorporation, so the concept of the unit prevails over the individual nature of the given element.

Embedded elements that cannot be used in other installations are referred to as "materials in reserve", being written off with the same criteria as the installation.

In the oil industry, the specialized fixed installations for the exploitation of hydrocarbons comprise the specific fixed technical units which serve the production and exploitation, the processing and refining of the raw products and the distribution of raw and finished products.

These facilities include specifically:

1. Extraction facilities: They are intended to ensure the extraction of the raw (liquid or gaseous) hydrocarbons, either by natural means (formation pressure), eruption or intervention of a mechanical procedure such as pumping or injection gas in the well or other fluids.

They are made up of production equipment (surface and bottom), pumping and compression equipment, etc.

2. Secondary recovery facilities: To ensure, by external energy input (gas or water injection in the field by wells other than extraction), a background pressure to maintain the flow rates and the improvement of the drainage of the producing levels, aiming for the best final recovery of the hydrocarbons.

It is composed especially of compression equipment, in the case of gas injection, or pumping and water purification in the case of water injection.

3. Collecting networks: They are made up of pipes, usually of small diameter, which, located in the fields, tend to gather the production of different wells at certain central points (collection centers).

They are composed especially of pipeline pipes and their accessories.

4. Primary hydrocarbon separation and treatment facilities. They are intended to ensure, generally by a simple physical or physical-chemical treatment, someras separations of the constituents of a different physical nature, contained in the outflow of the wells (liquid or gaseous hydrocarbons, water, sand, etc.)

5. Raw Product Treatment Facilities: They are intended to break down the raw complex products extracted into marketable products without modifying their chemical nature. They carry out operations such as gas desolation, sulphur removal or purification, etc.

6. Storage facilities: They are facilities that generally provide in proximity of the collecting centers a first storage with a view to their subsequent evacuation in more important quantities. They are made up of storage tanks, holding vats, pipes, etc.

7. Evacuation facilities and channels: These are those that ensure the transportation and evacuation of the hydrocarbons, from the main centers to the treatment facilities, or from these to the exit point of the Transport channels for large quantities and for long distance. It consists essentially of pipe pipes.

8. Ancillary facilities: They are intended to ensure normal operation and control and supervision of the holding.

They are composed of water, electricity, gas, heating, cooling, well monitoring, control and maintenance of production wells, etc.

UTIL

Comprises all the instruments whose use, in concurrency with a material, specializes in a given job. Therefore, it should be included in this heading both the use and the technical characteristics of the industry in general, as well as the essential destination for the exploration, exploitation, transport and storage of hydrocarbons.

Within the above concept is specifically understood the material and tools of geology, geophysics, survey, in which are included the special operations of well, cementation, instrumentation, production tests, measurements, etc.

SPECIFIC HYDROCARBON TRANSPORT FACILITIES BY PIPELINE

Specific fixed transport facilities are complex units, particularly affected by long distance transport and include all the materials or elements which can be assigned the same coefficient of amortization.

In the oil industry, the specific fixed installations for the transport of hydrocarbons comprise all those used for the transport by means of crude oil (oil or gas) or of the Petroleum products.

These facilities include:

1. Main and secondary pipes of transport: Constituted by the pipes themselves. (Pipelines or pipelines.)

2. Splicing or division installations: Constituted by the organs that ensure the link between different channels or allow the circulation of the products to be interrupted in the pipes.

3. Pumping and compression installations: They aim to ensure the circulation and regular progression of the products inside the pipes.

4. Storage and connection facilities: They are located at the terminal starting point of the pipes, ensuring the concentration of products in large quantities.

5. Secondary treatment facilities: These are intended to ensure, in the course of transport, the removal of impurities or sediments of a different nature from that of the transported hydrocarbons.

6. Hydrocarbon loading facilities: These are those located at the terminal of the transport pipes and intended to ensure the passage of the hydrocarbons to another means of transport in smaller quantities.

7. Ancillary transport installations: These are intended to ensure the normal operation, control and supervision of all transport operations by means of flow regulators, meters and other measuring instruments.