The Petroleum Hand-dug Well Law

(The Pyidaungsu Hluttaw Law No. 15 of 2017)

The 9^th Waning of Waso, 1379 M.E.

(17^th July, 2017)

            The Pyidaungsu Hluttaw hereby enacts this Law.

Chapter I

Title and Definition

1. This Law shall be called the Petroleum Hand-dug Well Law.

2. The  following  expressions  contained  in  this  Law  shall  have  the  meanings  as given  hereunder :

1. Union means the Republic of the Union of Myanmar;
2. Ministry means the Ministry of Electricity and Energy of the Union Government;
3. Petroleum Hand-dug Well means the well that, in accord with the terms and conditions of the licence, produces petroleum by manpower or by machine power  or  by both not more than 1000 feet depth;
4. Petroleum from Petroleum Hand-dug Well means liquid hydrocarbon, mixture of hydrocarbon or  inflammable mixture produced from petroleum hand-dug well. This expression does not include the natural gas;
5. Excavation of Petroleum Hand-dug Well means the business of excavation, drilling  or digging of the ground surface or the  underground rock of the block concerned  in order to obtain petroleum;
6. Production of Petroleum from Petroleum Hand-dug Well means the extraction business of petroleum yielded by excavation, drilling, or digging of ground surface or underground rock, or of naturally flowing  petroleum  from  underground to the surface of the land within the block in order to obtain petroleum;
7. Block means a block of hand-dug well scrutinized and permitted by the Ministry on the area proposed by an individual person or an organization formed with  Myanmar citizens desirous to operate the business activities of excavation of petroleum hand-dug well and production of petroleum from petroleum hand-dug well within the inland territorial of the Union;
8. Licence means the licence permitted and issued by the Ministry for each  block to operate excavation of petroleum hand-dug well and production of petroleum from petroleum hand-dug well to an individual  person or an organization formed with  Myanmar citizens;
9. Licensee means an individual person or an organization formed with Myanmar citizens obtaining the licence to operate excavation of petroleum hand-dug well and production of petroleum from petroleum hand-dug well within the block.

Chapter II

Objectives

3.The objectives of this Law are as follows:

1. to safeguard the interest of the Union and citizens;
2. to support the social and economic development of the area where block concerned is located;
3. to carry out systematic excavation and production of petroleum from petroleum hand-dug wells safely;
4. to minimize the likely environmental, social, and economic impacts resulting  from excavation of petroleum hand-dug well and production of petroleum from petroleum hand-dug well.

Chapter III

Application for the Block and Licence

4. An applicant to operate excavation of petroleum hand-dug well and production of petroleum from petroleum hand-dug well shall only be a citizen of Myanmar  or an organization formed with  Myanmar citizens.

5. An individual  person or an organization formed with  Myanmar citizens desirous to operate the business of excavation of petroleum hand-dug well and production of petroleum from petroleum hand-dug well shall apply to the Region or State Government or the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone concerned by mentioning the location and area of the block, and recommendations of the respective  departments completely.

6. The respective Region or State Government or the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone shall scrutinize the descriptions contained in the application whether or not they are in conformity with the stipulations, and submit to the Ministry together with its remark.

7. When  receiving  the application submitted under section 6, the Ministry shall scrutinize the application, and:

1. may, if necessary, request the remarks of the ministries concerned;
2. may refuse the application unless the respective ministries approve it or it is in conformity with the stipulations;
3. shall, if it is refused, reply the cause of refusal to the respective Region or State Government or the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone.

8. The Ministry shall, in respect of the block having been carried out under section 7; scrutinize whether or not it is free from the block area of petroleum and natural gas exploration and excavation stipulated or appropriated to be stipulated by  Ministry itself and other requirements, and if it is conformity with the stipulations, shall  submit  to the Union Government to permit that block.

9. If the Union Government agrees with submission of the Ministry under section 8, the Ministry shall issue a licence term of a year to the applicant relating to that block.

10. The licensee desirous to extend the licence contained in section 9 shall, with the application for extension, apply to the respective Region or State Government or the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone, two months in advance before the expiry of the term of the licence.

11. The respective Region or State Government or the Leading Body of  Self-Administered Division or Leading Body of  the Self-Administered Zone receiving the application for extension shall securitize the application for extension, and submit it to the Ministry a month in advance before the expiry of the term of the licence.

12. The Ministry, after scrutinizing the application for extension, shall:

1. issue a licence term of a year to the applicant if it is in conformity with the stipulations;
2. refuse, by reason, the application not being in conformity with the stipulations,  and notify the refusal to the applicant through the Region or State Government or  the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone.

Chapter IV

Duties and Powers of the Ministry

13.The Ministry:

1. may stipulate the terms and conditions of the licence, amend and revoke it from time to time;
2. shall inspect whether or not the licensee  complies with the terms and conditions of the licence;
3. shall, as necessary, take action against the licensee by administrative means, if it knows that it is inspected and found that the licensee fails to comply with the terms and conditions of the licence under subsection (b) or from submission of the Region or State Government or  the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone;
4. shall collect the stipulated application fee and licence fee;

14. When the Union Government, in accordance with the existing laws, acquires all or a part of the block area of being carried out by the licensee for the necessity of the public interest, the Ministry may  scrutinize and permit another suitable place if the licensee re- applies for a substitute permission to operate business.

Chapter V

Duties and Powers of the Region or State Government or the Leading Body of the Self-Administered Division or Leading Body of the Self-Administered Zone

15. The duties and powers of the Region or State Government or the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone are as follows:

1. scrutinizing whether or not the licensee complies with existing laws, rules,  notifications, orders and directives, and taking action against him;
2. submitting to the Ministry if it is found that the licensee fails to comply with any terms and conditions contained in the licence;
3. taking the administrative action against licensee as necessary if the licensee fails to comply with existing laws and the provisions contained in this law;
4. submitting to the Ministry if it arises that the licensee should be punished with   suspension, withdrawal, or revocation of the licence;
5. supervising on, directing on, and scrutinizing the licensee to operate the excavation   of petroleum hand-dug well, production of petroleum from petroleum  hand-dug well, storing,  transport, refining and selling of petroleum from petroleum hand-dug well in accordance with the applicable laws, rules, notification, orders, directives and procedures and taking necessary action against him;
6. collecting royalty to be paid for the petroleum produced from petroleum hand-dug well and land rent for the block;
7. ensuring that the licensee send the list of daily production of petroleum from petroleum hand-dug well within the first seven days of every month;
8. ensuring that the licensee submit immediately to the Ministry if the natural gas yields from  petroleum hand-dug well.

Chapter VI

Conditions to be Abided by the Licensee

16. The licensee shall:

1. carry out in accordance with the provisions of this Law and existing laws, and the terms and conditions of the licence;
2. not pollute and damage the environment of the respective area, and not impact the social and economy of the local people in excavation of  petroleum hand-dug well and production of petroleum from petroleum hand-dug well in accordance with existing laws, and restore the block to its former condition after finishing the operation;
3. carry out in accordance with existing laws in respect of employees in the excavation of petroleum hand-dug well and production, storage and refinery of petroleum from petroleum hand-dug well;
4. operate and supervise by himself. The whole or part of the block shall not be transferred to any other person or organization formed with Myanmar citizens;
5. commence the excavation of petroleum hand-dug well and production of petroleum from petroleum hand-dug well within three months from issue date of the licence;
6. submit, in accordance with the stipulations, data relating to the excavation of petroleum hand-dug well and production of petroleum from petroleum hand-dug well and the extracted petroleum sample to the Myanma Oil and Gas  Enterprise;
7. send the list of the amount of daily petroleum production to the Ministry through the respective Region or State Government or the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone monthly without failure;
8. return all or part of the land area permitted to produce petroleum when the Union Government, if necessary, acquires land in accordance with the existing laws for the interest of the public. The licensee may, in accordance with this law, re-apply for a substitute permission to operate business in another suitable place after returning as such;
9. terminate the operation on the date of withdrawal or cancellation of the licence if the licence is withdrawn or cancelled, and shall remove from the block within one month;
10. return the block licence after notifying the  Ministry through the respective Region or State Government or the Leading Body of Self-Administered Division or Leading Body of  the Self-Administered Zone if he desires not to continue the operation within the term of the licence;
11. be inspected and supervised as may be necessary by the inspection team formed by the respective Region or State Government or the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone in respect of the operation including the quality of equipment and disaster prevention measures;
12. comply with special plans to prevent the fire hazard;
13. report immediately to the Ministry if the natural gas yields from petroleum hand-dug well.

17. The licensee shall:

1. abide by the existing laws, rules, notifications, orders, directives, procedures relating to the storage, transport, refining and selling of petroleum yielded from petroleum hand-dug well;
2.  pay the income tax, and taxes and duties in accordance  with  existing the Income   Tax  Law and  the Taxation of the Union Law.

Chapter VII

Administrative Actions

18. (a)The Ministry may impose the following one or more administrative penalties on the licensee who fails to comply with the terms and conditions of the licence:

         (i) warning;

         (ii) fine;

         (iii) suspension of the licence for a limited period;

         (iv) withdrawal or revocation of the licence.

(b) The Region or State Government or the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone concerned may impose the following one or more administrative penalties on the licensee who fails to comply with the obligations under this Law, and violate the regulations under this Law:

         (i) warning;

         (ii) fine;

(c) The person of being imposed with any penalties under sub-section (a) or sub-section (b) may submit to the Ministry in order to revise within 30 days from the date of punishment. The Ministry may, after scrutinizing such submission, approve, revoke or amend the original decision.

Chapter VIII

Offences and Penalties

19. Whoever operates the excavation of petroleum hand-dug well and production of petroleum from petroleum hand-dug well without licence shall, on conviction, be punished with imprisonment for a term from a minimum of one year to a maximum of three years or with a fine not less than five million kyats or with both, and the property relating to the offence shall also be confiscated.

20. Any licensee who fails to comply with any obligation contained in section16(b)  shall, on conviction, be punished with imprisonment for a term not exceeding there years or with a fine not exceeding fifty hundred thousand kyats or with both, and he shall compensate for environmental pollution or damage or social and economic impact.

21. Any licensee who violates any stipulations or fails to comply with any conditions contained in section 16 (d), (i) and (l) shall, on conviction, be punished with imprisonment for a term from a minimum of six months to a maximum of one year or with a fine not less than three million kyats or with both, and the property relating to  the offence shall also be confiscated.

Chapter IX

Miscellaneous

22. If the licence issued under any existing law before this Law has come into force has not expired its term yet;

1. it shall be deemed as the licence issued under this law;
2. the term of such licence shall be the same as terms in it;
3. the renewal of the licence shall be carried out in accordance with the provisions of this Law if the licence is expired;

23. (a) The applicant of excavation of petroleum hand-dug well and production of petroleum from petroleum hand-dug well shall:

           (i )  undertake to ensure that there is no other owner or any right-holder bye-laws and that his rights to operate is in accordance with the law in the block applied to operate by himself;

          (ii) undertake and resolve the objection by himself if the owner or any right-holder bye-laws objects upon his block after obtaining the licence.

     (b)  The Ministry may withdraw the licence issued to licensee for excavation of petroleum hand-dug well and production of petroleum from petroleum   hand-dug well if the licensee cannot resolve the objection relating to the block in accordance with subsection (a).

24. The offences under this Law shall be prescribed as cognizable offences.

25. In implementing the provisions contained in this law, the Region or State Government or the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone concerned shall supervise not to occur the acts of monopolization that are the acts of restraint on competition.

26. (a) The licensee under this law shall contribute fund depending on the amount of petroleum extracted from operation in accordance with the conditions prescribed by the Region or State Government or the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone concerned to carry out social and economic development of the area where the relevant blocks are located.

     (b) The respective Region or State Government or the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone shall carry out transparently in receipt, maintenance, withdrawal and expending, and management of such fund.

27.  In implementing the provisions contained in this law:

     (a) The Ministry may, with the approval of the Union Government, issue rules, regulations, and bye-laws;

     (b) The Ministry may issue notifications, orders, directives, and procedures;

    (c) The Region or State Government or the Leading Body of Self-Administered Division or Leading Body of the Self-Administered Zone concerned may issue the necessary notifications, orders, and directives for their  respective  area.

  I hereby sign under the Constitution of the Republic of the Union of Myanmar.

                                             Sd./ Htin Kyaw

                                            President

                                                  The Republic of the Union of Myanmar