Exploitation and storage of hydrocarbons

The responsible minister shall grant a right for exploration to the concessionaire in the concession contract for the given area. Subsequent to entering into the contract, the concession company established by the concessionaire and being as the mining entrepreneur, shall exclusively be responsible for and obliged to the conduct of mining operations to which the permits are issued by the Mining Authority. The concession contract may be concluded for 35 years at most which may be prolonged once, at most by the half of the period for concession contract. Prolongation shall be initiated at least 6 months prior to expiry of the concession contract. See detailed rules for concession at ’Koncesszió’. 


Exploration, development and exploitation of hydrocarbons as well as storage shall be – beyond general provisions – permitted by considering specific regulations set in the Act on mining (Bt.). 

 

  • as for hydrocarbons, the condition of concluding a concession contract shall be the provision of financial collateral of 200,000,000 HUF as bank guarantee as per each exploration block [paragraphs (8)-(9) of Section 22/A of Bt.], 
  • the exploration period for conventional hydrocarbons shall be the maximum of 6 years (the initial period for exploration may be 4 years which may be prolonged once, at most by the half of the initial period for exploration); as for non-conventional hydrocarbons, it shall be the maximum of 8 years, regarding that the initial period may be prolonged twice (4+2+2 years) [paragraph (1) of Section 14 of Bt.].
  • the mining entrepreneur shall be responsible for submitting the final exploration report within 5 months from the termination of exploration activities but at most from the expiry of exploration period (earlier 6 months) [paragraph (13) of Section of 22 of Bt.]. 
  • subsequent to the establishment of mining plot, the repeated exploration of hydrocarbon fields shall be performed within 2 years from 10th year elapsing subsequent to the establishment of mining plot, in failing to do so, it shall be the subject to sanctioning, namely the reduction of area of the mining plot. Such available areas shall be announced again in the frame of concession [Section 22/C of Bt.]. 
  • as for hydrocarbons, the total exploration area for each entrepreneur may be 15,000 km2 at most [paragraph (13) of Section 22/A of Bt.]. 


Entrepreneurs entitled to oil and gas exploitation may initiate the extension of mining plot to the underground storage of hydrocarbon according to paragraph (2) of Section 5 of Bt. The entrepreneur having the permit for operation specified in separate legislation may obtain – upon application - the property right of hydrocarbon owned by the state in the underground storage site as its natural location of occurrence, prior to exploitation pursuant to the provision of paragraph (1) of Section 3 of Bt.