THE HYDROCARBONS (PROSPECTING, EXPLORATION ... - PGS

THE HYDROCARBONS 

(PROSPECTING, EXPLORATION AND EXPLOITATION) LAW 

No. 4(I) of 2007 

Preamble. 

For the purpose of harmonization with the European Community 

Act referred to as the- 

Official Journal of 

the E.U.: L164, 

30.5.1994, p. 3. 

“Directive 94/22/EC of the European Parliament and of the Council 

of 30 May 1994 on the conditions for granting and using 

authorizations for the prospecting, exploration and production of 

hydrocarbons (OJ L 164 of 30/05/1994, p. 3), 

The House of Representatives enacts as follows: 

Short title. 

1. This law may be cited as the Hydrocarbons (Prospecting, 

Exploration and Exploitation) Law of 2007. 

Interpretation. 

2. In this Law, unless the context otherwise requires- 

“applicant” means any entity that submits an application for the 

grant of a licence in accordance with article 5; 

“by-products” means the products that are derived from the 

processing of hydrocarbons; 

“Chairman” means the Chairman of the Consultation Committee; 

“Commission” means the Commission of the European 

Communities; 

“continental shelf” has the meaning attributed to it in article 76 of 

the Convention; 

–THIS IS NOT AN OFFICIAL TRANSLATION–

2 

203 of 1988. 

“Convention” means the United Nations Convention on the Law of 

the Sea that was opened for signature on 28 th July 1994 and was 

ratified by the United Nations Convention on the Law of the Sea 

(Ratifying) Law of 1988, as in force in the Republic from time to 

time; 

“Council” means the Council of the European Communities; 

“Court” means Court as referred to in section 32; 

“entity” means a natural or legal person or a group thereof that 

submits or is likely to submit an application for a licence or is the 

holder of licence; 

140(I) of 2005. 

“environmental authority” has the meaning attributed to it in the 

Assessment of Impact on the Environment from Certain Works 

Law; 

“exploitation of hydrocarbons” means the development and 

production of hydrocarbons or any treatment in order to make them 

marketable and the storage and the transportation of the 

hydrocarbons and their by-products to the loading installations for 

further disposal. In the abovementioned treatment, refining is not 

included; 

"exploration for hydrocarbons" means the exploration for the 

discovery of hydrocarbon deposits by any appropriate method, 

including drilling; 

“hydrocarbon exploitation licence” means the right to exploit 

hydrocarbons in a geographical area; 

“hydrocarbon exploration licence” means the right to explore for 


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"hydrocarbon prospecting licence" means the right to prospect for 


"hydrocarbons" means any kind of petroleum products in solid, 

liquid or gaseous state, including crude oil or natural gasoline, 

natural hydrocarbon gases as well as all related minerals or 

substances of any kind extracted together therewith; 

“licence” means the hydrocarbon prospecting and/or exploration 

and/or exploitation licence in a geographical area; 

"licensee" means any person to whom a licence has been granted 

by the Council of Ministers in accordance with the provisions of this 

Law;· 

“member state” means member state of the European Union; 

“Minister” means the Minister of Commerce, Industry and Tourism; 

“prospecting for hydrocarbons” means the attempt to locate 

hydrocarbons and/or to evaluate the hydrocarbon potential by any 

appropriate method other than drilling;· 

“third country” means a country that is not a member state; 

90 of 1972 

56 of 1982 

7 of 1990 

28 of 1991 

91(I) of 1992 

55(I) of 1993 

72(I) of 1998 

59(I) of 1999 

“town planning authority” has the meaning attributed to it in the 

Town Planning and Land Planning Law. 


4 

142(I) of 1999 

241(I) of 2002 

29(I) of 2005. 

Ownership of 

hydrocarbons. 

3.-(1) The ownership of hydrocarbons wherever they occur in 

Cyprus, including the Territorial Waters, the continental shelf and 

the Exclusive Economic Zone of the Republic, belongs and it is 

deemed that it always belonged to the Republic. 

64(I) of 2004. 

(2) The ownership rights of the hydrocarbons that are situated in 

the zone of offshore jurisdiction of the Republic, as they are 

determined in the Exclusive Economic Zone Law, shall be 

exercised in conjunction with the rights in the continental shelf as 

they are determined in the Convention. 

Determination of 

the areas on which 

the activities can 

be exercised and 

refusal to allow 

access to the 

activities on the 

grounds of national 

security. 

4.-(1) The Council of Ministers retains the right to determine within 

the territory of the Republic as well as in areas where the Republic 

has sovereign rights and jurisdiction as far as prospecting, 

exploration and exploitation of hydrocarbons concerns, according 

to the Convention or other international convention or internal 

legislation, the areas that are available for the exercise of the 

activities of prospecting, exploration and exploitation of 

hydrocarbons. 

(2) Whenever an area is available for exercising the activities 

set out in subsection (1), the Council of Ministers shall ensure that 

there is no discrimination between entities as regards access to, 

and exercise of, those activities. 

(3) The Council of Ministers may, on grounds of national 

security, refuse to allow access to and exercise of the activities 

referred to in subsection (1) by any entity that is effectively 

controlled by a third country or a third country national. 


5 

Granting of 

licences and 

conditions for their 

granting. 

5.-(1) The Council of Ministers may grant a licence, following the 

submission of applications by the entities to the Minister, for which 

the procedure shall be initiated in the following manners - 

(a) at the initiative of the Council of Ministers, through 

invitation by the Minister for the submission of 

applications, the invitation to be published in the Official 

Gazette and/or the Official Journal of the European Union 

at least 90 days before the closing date for the 

submission of applications; or 

(b) by means of invitation published by the Minister, with the 

approval of the Council of Ministers, in the Official Gazette 

and/or the Official Journal of the European Union inviting 

the submission of applications, following the submission 

of an application by an entity. Any other interested entities 

shall have a period of at least 90 days after the date of 

publication in which to submit an application. 

(2) For the purposes of subsection (1), the invitation to submit 

applications shall specify the type of licence, all the geographical 

areas which consist or may consist, in whole or in part, the object 

of the application, the proposed date or time limit for granting the 

licence, any conditions or requirements which the Council of 

Ministers considers should be made public during the procedure for 

submission of the applications, whether preference is given to the 

applications of entities which are autonomous and non-dependant 

natural or legal persons and anything at all that is considered 

essential to be determined in the invitation. 

(3) When the geographical areas that are made available for the 

grant of hydrocarbon exploration or exploitation licences are not 

delimited on the basis of a prior geometric division of the territory, 


6 

the Council of Ministers shall determine, by a notification published 

in the Official Gazette and/or the Official Journal of the European 

Union, the extent of each area in such a way that it does not 

exceed what is justified for the exercise of the activities in the best 

possible way from the technical and economic point of view. 

(4) The procedure for submission of applications and granting of 

licences in accordance with subsection (1) may not be initiated and 

licences may be granted by the Council of Ministers when the area 

for which a licence is requested: 

(a) is available on a permanent basis and this has been set 

forth in the invitation that has been published for the 

submission of applications or 

(b) has been the object of a previous procedure in 

accordance with subsection (1) and did not result in the 

granting of the licence or 

(c) 

has been abandoned by an entity and does not fall 

automatically under paragraph (a). 

(5) In applying subsection (4), the Minister shall publish a 

notification in the Official Gazette and/or an announcement in the 

Official Journal of the European Union, indicating the areas which 

are available and where the applicants may obtain the relevant 

detailed information. Any significant change of this information 

shall be the subject of an additional announcement. 

(6) The Council of Ministers may decide that the provisions of 

subsection (1) do not apply, when geological or production criteria 

justify the grant of a licence for an area to an entity that holds a 

licence for a contiguous area. In such a case, the Council of 


7 

Ministers ensures that the licensees for other contiguous areas are 

in a position to submit relevant applications and they are given 

sufficient time to do so. 

(7)(a) The following shall not be considered as the grant of a 

licence within the meaning of subsection (1): 

(i) the grant of a licence solely by reason of a change of 

name or ownership of an entity holding an existing 

licence or a change in the composition of such an 

entity or a transfer of licence or assignment of rights 

that arise from a licence; 

(ii) the grant of a licence to an entity possessing another 

form of licence where the possession of such a 

licence implies the right to the grant of the former 

licence; 

(iii) the decision of the Council of Ministers, taken within 

the framework of granting a licence which relates to 

the commencement, interruption, extension or 

cessation of the activities of the licence granted; 

(iv) the decision of the Council of Ministers to proceed 

through governmental authorities, supported by 

special consultants or experts, to surveys for the 

evaluation of the hydrocarbon potential of the 

country. 


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(b) Where the provisions of subsection (7)(a)(i) apply, the 

entity shall inform the Minister whenever a change is 

made in the name or ownership of the entity that holds a 

valid licence or the composition of the entity or where 

there is a transfer of the licence or assignment of rights 

arising from the licence. Where this obligation is not 

fulfilled, the granted licence may be cancelled and the 

entity shall be liable for the cancellation. 

(c) 

No person may possess a licence when the provisions of 

subsection (7)(a)(i) apply, without the prior approval of the 

Council of Ministers. 

(d) Any entity that possesses a licence in accordance with 

the provisions of subsection (7)(a)(i), without the prior 

approval of the Council of Ministers, is guilty of an offence 

and shall be liable, on conviction, to imprisonment for a 

term not exceeding twelve months or to a fine not 

exceeding five hundred thousand Cyprus pounds or to 

both such fine and imprisonment. 

Establishment of 

the Consultation 

Committee. 

6.-(1) For the purpose of this Law, a Consultation Committee is 

established, which is composed of the following members: 

(a) 

the Permanent Secretary of the Ministry of Commerce, 

Industry and Tourism, who acts as the Chairman of the 

Committee, or his representative; 

(b) the Attorney General of the Republic or his 

representative; 

(c) 

the Permanent Secretary of the Ministry of Foreign 

Affairs or his representative; 


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(d) 

the Permanent Secretary of the Ministry of Finance or 

his representative; 

(e) 

the Permanent Secretary of the Ministry of Agriculture, 

Natural Resources and the Environment or his 


(f) 

the Director of the Geological Survey Department or his 


(g) 

the Director of the Energy Service or his representative. 

(2) All the applications shall be addressed to the Minister, who 

convenes a meeting of the Consultation Committee by a written 

notice to the Chairman of the Consultation Committee to 

commence the procedure for the evaluation of the applications, in 

accordance with the provisions of section 10. 

Meetings of the 

Consultation 

Committee and 

procedures. 

7.-(1) The Chairman of the Consultation Committee supervises its 

functions, prepares the agenda of every meeting and takes the 

necessary steps so that the agenda, together with the written 

invitation to the meeting, is sent to each member at least twenty 

four hours prior to the meeting. 

(2) The Consultation Committee acts as a quorum when the 

Chairman and at least four members are present. 

(3) Any matter in relation to the internal functioning of the 

Consultation Committee shall be regulated by a decision, taken 

with absolute majority. 


10 

Responsibilities of 

the Consultation 

Committee. 

8.-(1) The Consultation Committee has a duty to examine the 

content of the applications that are submitted in accordance to this 

Law, to evaluate the applications for the granting of hydrocarbon 

prospecting, exploration and exploitation licences, as well as to 

evaluate any issue that appears in relation to the applications or is 

put before it for examination and to advise the Minister on any 

issue that arises during the application of the provisions of this 

Law. 

(2) More specifically and without prejudice to the generality of 

subsection (1), the Consultation Committee may examine and 

submit advice to the Minister in relation to the following matters: 

(a) 

any issue that may arise prior to the beginning of the 

procedure for the submission of the applications; 

(b) 

whether an application that is submitted in accordance 

with this Law shall be approved or rejected; 

(c) 

the transfer of a licence or the assignment of rights 

arising from a licence from the licensee to another 

entity; 

(d) 

the imposition of any conditions to the applicant on the 

approval of his application, as well as any revision of 

these conditions; 

(e) 

the degree of threat to the environment that may arise 

from the grant of an exploration licence and an 

exploitation licence to any entity and any protection 

measures ; 


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(f) 

the safety measures that have to be imposed in every 

case and the measures to ensure that persons who take 

part in these activities have the necessary qualifications; 

(g) 

measures for the protection of navigation;· 

(h) 

any other matter that the Consultation Committee 

considers necessary and which is related to the 

applications. 

Powers and 

obligations of the 

Consultation 

Committee. 

9.-(1) The Consultation Committee may, through its Chairman, 

convene a meeting, and/or be consulted by, experts on matters 

regarding the prospecting, exploration and exploitation of 

hydrocarbons, including any public officer or representatives of any 

organisation of public or private law, as well as any person whose 

opinion or expert knowledge on a particular matter may be 

considered useful or necessary. 

(2) The Consultation Committee may appoint special technical 

committees for the examination of specialised issues that are 

raised during the examination of any application or any other issue, 

to set their terms of reference and function and to take into account 

the conclusions of the studies that they carry out. 


12 

Procedure for 

examining the 

applications by the 

Consultation 

Committee. 

10.-(1) After the receipt of an application, which is submitted in 

accordance with section 5 and taking into account of the provisions 

of section 6(2), the Chairman shall send, without delay, a copy of 

the application to the members of the Consultation Committee and 

convene a meeting within 30 days for Committee to examine the 

application in accordance with the provisions of the following 

sections (2), (3) and (4). The Chairman may convene an 

exceptional meeting if he deems it necessary for various reasons 

either on his own initiative or on the request in writing from at least 

one member of the Consultation Committee. In case that an 

exceptional meeting is requested by a member of the Consultation 

Committee, then the Chairman must decide whether the reason 

raised by the member of the Committee justifies such a meeting. 

(2) During the above-mentioned meeting, the Consultation 

Committee shall consider whether the application is submitted in 

accordance with the provisions of this Law and whether the 

information that it contains is adequate for the evaluation of the 

application and the granting of a licence. 

(3) If during the meeting, the Consultation Committee considers 

that the information before it is not adequate or complete, it may 

request from the applicant or a third person any additional 

information it deems necessary or it may request the carrying out 

of inspections or obtaining the opinion of or reports by consultants 

or other experts on the matter. 

(4) If the Consultation Committee considers during the meeting 

that the information that is before it is sufficient, it examines the 

application and submits a reasoned opinion to the Minister as to 

whether the licence is to be granted and on which terms or as to 

whether the application is to be rejected. The opinion shall be 

contained in an advisory report, prepared by the Consultation 


13 

Committee, with a procedure decided by it. The Minister submits 

his opinion in relation to the applications and the advisory report of 

the Consultation Committee to the Council of Ministers for final 

decision. 

Environmental 

impact study. 

11.-(1) The entity that submits an application for a hydrocarbon 

exploration licence shall include in its application a short notice 

stating the hydrocarbon exploration activities and the possible 

impact that the exploration activities will have on the environment 

and ways of its effective handling. 

140(Ι) of 2005 

(2)(a) Subject to the provisions of sub-section (b), the entity that 

submits an application for a hydrocarbon exploitation licence is 

obliged to comply with the provisions of the Assessment of Impact 

on the Environment from Certain Works Law. 

(b) 

Notwithstanding the provisions of the Assessment 

Impact on the Environment from Certain Works Law, the 

applications, reports and other documents whose 

submission is provided in the said law, are submitted to 

the Minister when they refer to works that fall within the 

provisions of the present Law, and the Minister forwards 

them in due course to the town planning or 

environmental authority, according to the case. 

Criteria for the 

evaluation of the 

applications. 

12.-(1) The criteria on which the applications are evaluated shall be 

published in the Official Gazette and the Official Journal of the 

European Union prior to the commencement of the period for 

submitting applications. If the criteria have already been published 

in the Official Gazette, the publication in the Official Journal of the 

European Union may be limited to a reference of the publication in 

the Official Gazette. Any amendment to the criteria shall be 

published in full in the Official Gazette and the Official Journal of 


14 

the European Union. The criteria may relate to: 

(a) 

national security and public interest;· 

(b) 

the technical and financial ability of the applicant;· 

(c) 

the ways in which the applicant intends to carry out the 

activities that are specified in the licence; 

(d) 

when the licence is provided for financial consideration, 

the financial consideration that the applicant is offering 

in order to obtain the licence; 

(e) 

any lack of efficiency and responsibility that the 

applicant has shown under a previous licence. 

(2) In case where two or more applicants that are evaluated in 

accordance with the criteria of subsection (1) are deemed equal, 

then the Council of Ministers may adopt additional relevant criteria 

in order to choose to which entity the licence shall be granted. 

These additional criteria shall be published in the Official Gazette 

and in the Official Journal of the European Union. 

(3) Subject to section (3) of article 4, the Council of Ministers 

shall apply the above-mentioned criteria in such a way as to avoid 

discriminating between applicants. 

(4) The Council of Ministers may refuse the granting of a licence 

provided that discrimination is not introduced between the 

applicants. 

(5) When an application is rejected, then the reason for rejection 

shall be notified to the applicant. 


15 

Terms and 

conditions for 

granting a licence. 

13.-(1) The licences may be granted on such terms and conditions 

so that the following purposes are safeguarded: 

(a) 

the proper performance of the activities that the licence 

permits; 

(b) 

the financial contribution in money or in hydrocarbons; 

(c) 

national security; 

(d) 

public safety; 

(e) 

public health;· 

(f) 

security of transport; 

(g) 

the protection of the environment in accordance to 

section 11 and the terms specified in the Regulations 

that are issued under this Law; 

(h) 

the protection of biological and mineral resources and of 

national treasures possessing artistic, historic or 

archaeological value; 

(i) 

the safety of installations and workers;· 

(j) 

the planned management of the hydrocarbon resources, 

such as particularly the rate at which they are depleted 

or the optimisation of their recovery; 

(k) 

the need to ensure revenue to the Republic. 


16 

(2) The terms and conditions for the granting of licences shall 

be applied in such a way so that discrimination is not introduced 

between the applicants. 

(3) The conditions and requirements concerning the exercise or 

termination of the activity, which apply to each type of licence by 

virtue of the laws, regulations and administrative provisions in force 

at the time of submission of the applications, as well as any of their 

amendment during the procedure of examining the applications, 

shall be notified to the interested entities. 

Granting of rights 

to the licensees. 

14.-(1) The hydrocarbon prospecting licence grants to the licensee 

rights to prospect for hydrocarbons in the area for which the licence 

was granted, under the terms and conditions of the licence 

granted. 

(2) The hydrocarbon exploration licence grants to the licensee 

exclusive rights to explore for hydrocarbons in the area for which 

the licence was granted, under the terms and conditions of the 

licence granted, and in the case of a commercial discovery the 

right to be granted an exploitation licence related to such a 

discovery, in accordance to the provisions of this Law and the 

Regulations. 

(3) The hydrocarbon exploitation licence grants to the licensee 

exclusive rights to exploit hydrocarbons in the area for which the 

licence was granted, under the terms and conditions of the licence 

granted. 

Duration of validity 

of the licence. 

15. The duration of validity of the licence shall not exceed the time 

that is necessary for the conclusion of the activities that are 

specified in the licence. The Council of Ministers renews or 

extends the licence for such a period as it is provided in the 


17 

Contract between the government of the Republic and the licensee 

and in accordance with the terms and conditions of the licence. 

Participation of the 

Republic in the 

activities of 

hydrocarbon 

prospecting, 

exploration and 

exploitation. 

16.-(1) The management of the participation of the Republic in the 


hydrocarbons may be carried out by the Republic itself or by 

means of a legal person determined by the Council of Ministers. 

(2) The conditions for paying the contributions that are 

mentioned in section 13(1)(b), as well as any claim for the 

Republic’s participation, are prescribed by the Council of Ministers 

in such a way that the independence of management of the entities 

is preserved. 

(3) Where the grant of licences is subject to the participation of 

the Republic in the activities, and where a legal person has been 

entrusted solely for the purpose of this participation, or when the 

Republic itself manages the activities, neither the legal person nor 

the Republic shall be prevented from assuming the rights and the 

obligations associated with such participation, provided that the 

Republic: 

(a) 

shall not provide any information nor exercise any voting 

rights on decisions regarding sources of procurement of 

the entity; 

(b) 

shall not exercise in combination with any public entities 

a majority voting right; and 


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(c) 

voting shall be based exclusively on transparent and 

objective principles that shall not introduce 

discrimination and shall not prevent the relevant 

administrative decisions of the entity to be based on 

common commercial principles. 

(4) Without prejudice to the provisions of section (3), the legal 

person or the Republic may oppose any decision of the entity, 

which does not conform to the conditions and requirements of the 

granting of the licence, regarding the depletion of the reserves and 

the protection of the financial interests of the Republic: 

Provided that, the option to oppose a decision shall be 

exercised in a non-discriminatory manner, particularly regarding 

decisions on investment and sources of supply of the licensee, 

unless they breach the national legislation or the international 

legality. 

(5) Where the Republic’s participation in the activities is 

managed by a legal person, which also holds a licence, then: 

(a) 

the legal person shall keep separate accounts for its 

commercial role and its role as manager of the 

Republic’s participation; and 

(b) 

it shall ensure that there is no flow of information from 

the legal person responsible for the management of the 

Republic’s participation to the legal person which holds 

a licence. 

(6) If the legal person responsible for the management of the 

Republic’s participation engages the legal person that holds a 

licence as a consultant, the former may provide the latter with the 


19 

necessary information for the execution of his functions as 

consultant. The licensees, to whom the information relates, shall 

be informed in advance of the content of the information, so that 

they have sufficient time to raise objections, which are submitted to 

the Minister and the Minister decides after hearing the views on the 

matter from the two parties. 

Information that 

has to be provided 

by the licensees. 

17. The Minister may request the licensees to provide information 

on existing or future sources of their supply in relation to their 

obligations under their licences, or for any other matter that is 

considered necessary by the Minister, either at regular intervals or 

when he considers it necessary. The Minister may request this 

information as long as it is justified on the following grounds: 

(a) 

public morality; 

(b) 

public order; 

(c) 

public security; 

(d) 

protection of health and life of humans, animals or 

plants; 

(e) 

protection of national treasures possessing artistic, 

historic or archaeological value; 

((f) 

protection of industrial and commercial property; 

(g) 

observance of the national and international legality. 

Report to the 

Commission. 

18. The Minister shall publish in the Official Gazette each year, and 

notify the Commission, a report that contains information on the 

geographical areas for which licences have been granted, on the 


20 

type of the licences granted, on the licensees and their 

composition, as well as on the estimated reserves in the Republic. 

Authorised 

officers. 

19.-(1) The Minister may, by notification published in the Official 

Gazette, authorise an appropriate person or persons to act as 

authorised public officers for the enforcement of this Law and the 

Regulations issued under it and the terms of the licence. 

(2) The authorised public officers may carry out any or all of the 

following: 

(a) enter at any reasonable time, showing their 

professional certificate upon request and without prior 

warning, any building or premises or any other place, in 

which they have reasonable cause to believe that there 

is an infringement of the conditions of the licence or any 

other infringement of this Law and the Regulations: 

Provided that an authorised public officer may not 

enter any residence without the prior ensuring of a 

judicial warrant; 

(b) carry out such searches, examinations, tests, 

inspections, reviews and investigations that may be 

necessary to establish whether there is an infringement 

of the conditions of the licence of a licensee or any other 

infringement of this Law and to inspect, take extracts or 

copies of documents that are related to the 

hydrocarbons activities; 


21 

138 (Ι) of 2001 

37(Ι) of 2003. 

(c) 

keep copies of any evidence or records for which they 

have a reasonable cause to believe that, may be 

needed for the purpose of providing evidence in criminal 

or civil proceedings for any offence committed under this 

Law and keep copies of any information that is required 

to be given to the Minister in accordance with section 

17, notwithstanding the provisions of Processing of 

Personal Data (Protection of the Individual) Laws; 

(d) 

carry out anything that is considered necessary and 

reasonable in order to ensure that the provisions of this 

Law and the Regulations issued under it are observed. 

(e) 

enter at all reasonable times, showing the certificate of 

his status, if required, and without any prior notice to any 

building, structure, area, vehicle, vessel or aircraft, and 

to examine any machinery or equipment, which has 

been, is being or is to be used in connection with the 

hydrocarbon operations; 

(f) 

take samples of hydrocarbons, water or other liquid, 

gaseous or solid substances and make such 

examinations, analyses, tests, checks, inspections and 

inquiries as are necessary to establish whether there is 

an infringement of the conditions of the licence of the 

licensee or any infringement of this Law and the 

Regulations. 


22 

(3) Any licensee and any person who is the owner, occupier or 

person in charge of any building, structure, area, vehicle, vessel or 

aircraft, machinery or equipment referred to in sub-section (2), shall 

provide the Minister with all reasonable assistance, including the 

provision of necessary means of transport, for the effective 

exercise of the his powers. 

Confidential 

information and 

confidentiality of 

the received 

information. 

15(Ι) of 2000. 

20.-(1) Any evidence and information collected and used by an 

authorised public officer in accordance with the provisions of this 

Law, shall be considered confidential within the meaning of section 

13 of the Statistics Law. 

(2) Any authorised public officer who takes part in the carrying 

out of searches or inspections, as provided for in sub-section (2) of 

section 19 and without a lawful authorisation by the Minister 

publishes or notifies to any unauthorised person information that 

he has been given or received during the exercise of his duties, 

commits an offence, and in case of a conviction, shall be liable to 

imprisonment for a term not exceeding twelve months or to a fine 

not exceeding twenty thousand pounds or to both such 

imprisonment and fine: 

Provided that, the obligation for confidentiality shall not 

apply- 

(a) 

when the written consent of the person that is 

responsible for the management, functioning, 

maintenance or keeping of the building or the premises 

in which the searches, examinations, tests, inspections, 

reviews and investigations in accordance with subsection 

(2) of section 19, has been given; 


23 

(b) 

before a Court; 

Section 44 

36 of 1982 

84 of 1983. 

(c) 

before an Investigation Committee which has been 

appointed and acts in accordance to the Investigation 

Committees Law; 

Chapter 155 

92 of 1972 

2 of 1975 

12 of 1975 

41 of 1978 

162 of 1989 

142 of 1991 

9 of 1992 

10(Ι) of 1996 

89(Ι) of 1997 

54(Ι)of 1998 

96(Ι) of 1998 

14(Ι) of 2001. 

(d) before a criminal investigator that conducts an 

interrogation in accordance with section 4 of the 

Criminal Procedure Law. 

61(Ι) of 1996 

25(Ι) of 1997 

41(Ι) of 1998 

120(Ι) of 1999 

152(Ι) of 2000. 

(e) 

before the Unit for the Suppression of Crimes of 

Concealment in accordance with the Concealment, 

Investigation and Confiscation of Income from Certain 

Criminal Acts Laws. 

207(Ι) of 1989 

87(Ι) of 2000 

155(Ι) of 2000. 

(f) 

before the Committee for the Protection of Competition 

in the context of exercising its powers, in accordance 

with the Protection of Competition Laws. 

Criminal offences 

in infringement of 

the provisions of 

section 19. 

21.-(1) A person commits an offence if he- 


24 

(a) 

prohibits an authorised public officer from entering any 

premises in accordance with section 19(2)(a); 

(b) 

prohibits an authorised public officer from conducting 

searches, examinations, tests, inspections, reviews and 

investigations in accordance with section 19(2)(b); 

(c) 

prohibits an authorised public officer from keeping 

copies of any evidence in accordance with section 

19(2)(c); 

(d) 

prohibits an authorised public officer from doing 

anything he considers necessary for the enforcement of 

the provisions of this Law in accordance with section 

19(2)(d). 

(e) 

prohibits the powers of entry and inspection of an 

authorised officer who acts in accordance with 

Regulations issued under this Law. 

(2) Any person that is guilty of an offence in accordance with 

subsection (1) is liable, on conviction- 

(a) 

to imprisonment for a term not exceeding six months or 

to a fine not exceeding ten thousand Cyprus pounds or 

to both such imprisonment and fine; and 

(b) 

in case of a second or subsequent conviction, to 

imprisonment for a term not exceeding twelve months or 

to a fine not exceeding twenty thousand Cyprus pounds 

or to both such imprisonment and fine. 


25 

Prospecting, 

exploration or 

exploitation of 

hydrocarbons 

without a licence 

or in breach of he 

terms of a licence. 

22. Any person conducting prospecting, exploration or exploitation 

of hydrocarbons without possessing a licence or in breach of his 

licence shall be guilty of an offence and shall be liable on 

conviction to imprisonment for a term not exceeding two years or to 

a fine not exceeding one million Cyprus pounds or to both such 

imprisonment and fine. In case of a second or subsequent 

conviction, he is liable to imprisonment for a term not exceeding 

four years or to a fine not exceeding five million Cyprus pounds or 

to both such imprisonment and fine. 

Revocation, stay 

or invalidation of a 

licence. 

23.-(1) The Council of Ministers may revoke, stay or cancel a 

licence where the licensee infringes the provisions of section 21, 

without prejudice to any claim that has already accrued against the 

licensee. 

(2) The Council of Ministers may revoke, stay or cancel a 

licence where a licensee does not request the previous consent of 

the Council of Ministers as required by the provisions of sections 

5(7)(b) and (c) and of section 28(1), without prejudice to any claim 

that has already accrued against the licensee. 

Exemption from 

the provisions of 

section 22. 

24. The provisions of section 22 do not apply to any person that 

during lawful drilling for finding water or other lawful functions, 

releases hydrocarbons. 

Criminal liability of 

officials of legal 

persons. 

25. When an offence under the provisions of this Law or 

Regulations made thereunder is committed by a legal person or by 

a person who acts on behalf of a legal person and it is proven that 

the offence has been committed with the consent, complicity or 

approval or assistance or negligence of a member of a board, 

director, secretary or any other person acting under such capacity, 

this person is also guilty of the offence committed by the legal 

person. 


26 

Powers of the 

Court for seizure 

and confiscation. 

26. The Court may order that any quantity of hydrocarbons that has 

been obtained by committing an offence shall be seized, as well as 

any machine, equipment, automobile, ship or aircraft and also any 

construction that has been used for committing the offence shall be 

confiscated. Where the seizure of hydrocarbons is not possible, the 

Court may order that the person committing the offence shall pay a 

fine to at least the value of the quantity of the hydrocarbons that 

have been unlawfully obtained. 

Transfer of licence 

or assignment of 

rights arising from 

a licence. 

27.-(1) No licensee may transfer a licence or assign the rights 

arising from a licence to any other entity, unless he has the 

consent of the Council of Ministers, which may be granted if- 

(a) 

it does not endanger national security; 

(b) 

the Council of Ministers is satisfied that an entity to 

whom the licence would be transferred or the rights 

arising from a licence would be assigned has sufficient 

technical knowledge, experience and financial resources 

to carry out the activities of prospecting, exploration and 

exploitation of hydrocarbons; 

(c) 

the entity to which the licence would be transferred or 

the rights arising from a licence would be assigned 

undertakes to comply with any additional terms and 

conditions that the Council of Ministers considers 

necessary to impose. 

(2) Any licensee that transfers a licence or assigns the rights 

arising from a licence without the approval of the Council of 

Ministers commits an offence and on conviction, shall be liable to 

imprisonment for a term not exceeding twelve months or to a fine 


27 

not exceeding five hundred thousand Cyprus pounds or to both 

such imprisonment and fine. 

Control of a 

licensee by a third 

country or national 

of a third country. 

28.-(1) No entity may, after the grant of a licence to the entity, 

come under the direct or indirect control of a third country, or 

national of a third country, without the prior approval of the Council 

of Ministers. 

(2) Any licensee that comes under the direct or indirect control 

of a third country or national of a third country without the prior 

approval of the Council of Ministers, commits an offence and on 

conviction, shall be liable to imprisonment for a term not exceeding 

twelve months or to a fine not exceeding five hundred thousand 

Cyprus pounds or to both such imprisonment and fine. 

Refusal of granting 

a licence to an 

entity that is 

controlled by a 

third country or a 

national of a third 

country. 

29.-(1) The entities may inform and grant information to the 

Minister or any authorised public officer who is responsible for the 

collection of such information, where the entities encounter any 

general difficulty, de jure or de facto, in relation to their access to 


hydrocarbons as well as the exercise of such activities in third 

countries. 

(2) The Minister shall inform the Commission of any general 

difficulty, de jure or de facto, encountered by the entities and which 

relates to the access to the activities mentioned in subsection (1) 

as well as the exercise of these activities. 

(3) The Council of Ministers may, after an authorisation granted 

by the Council, refuse the grant of a licence to an entity which is 

effectively controlled by a third country or by a national of a third 

country when the third country does not grant to the entities of the 

Republic or to entities of the Member States, treatment comparable 


28 

to that provided for by the entities of the Republic or the Member 

States in relation to access to the activities of prospecting, 

exploration and exploitation of hydrocarbons. 

Power to issue 

Regulations and 

Orders. 

30.-(1) The Council of Ministers may issue Regulations and the 

Minister may issue Orders for the better application of the 

provisions of this Law. 

(2) Without prejudice to the generality of subsection (1), the said 

Regulations may relate to all or some of the following purposes, 

that is- 

(a) 

prescribing the forms that may be used for the 

implementation of the provisions of this Law; 

(b) 

prescribing the manner in which applications may be 

submitted for the grant, renewal or transfer of a licence 

or the assignment of rights arising from a licence 

pursuant to this Law, as well as the persons by whom 

applications may be submitted; 

(c) 

regulating the licences including the drilling for the 

exploration and exploitation of hydrocarbons, as well as 

the protection of resources of hydrocarbons; 

(d) 

the manner in which the licensees shall provide 

information or keep the Minister informed; 

(e) 

regulating- 

(i) 

(ii) 

the avoidance of interference with other activities in 

or near the area included in the licence; 

any matter that relates to the responsibilities and 


29 

obligations of the authorised public officers in 

accordance with section 19. 

(f) 

regulating matters dealing with the conclusion of 

Contracts between the Republic of Cyprus and the 

licence holders 

(3) With the Regulations issued under sub-section (1), offences 

may be created that are punishable with penalties that are 

provided in the said Regulations. These penalties may not exceed 

imprisonment for a term of four years and pecuniary penalty of five 

million Cyprus pounds. 

(4) Without prejudice to the generality of subsection (1), the said 

Orders may relate to: 

(a) 

the keeping of a hydrocarbons register by the Minister; 

(b) 

the construction of common installations; 

(c) 

the determination of the fees payable in relation to any 

application. 

Administrative fine. 

31.-(1) The Minister may impose an administrative fine for any 

breach of this Law or the Regulations that are issued thereunder 

according to the nature, the seriousness and the duration of the 

breach, up to two hundred and fifty thousand Cyprus pounds. In 

case of a second or subsequent breach, the Minister may impose 

an administrative fine of up to one million Cyprus pounds. 


30 

(2) The administrative fine shall be imposed on the licensee 

following a reasoned decision of the Minister, confirming the 

breach, after the Minister has heard the interested parties or has 

given them the opportunity to express their views. 

(3) A decision to impose an administrative fine may be appealed 

by recourse before the Council of Ministers. The recourse shall be 

made in writing within a time limit of thirty days from the date of 

service of the notice of the imposition of the administrative fine. 

(4) The Council of Ministers examines the matter and, after 

having heard the interested parties or having given them the 

opportunity to express their views, issues a decision pursuant to 

subsection (5). 

(5) The Council of Ministers may issue one of the following 

decisions: 

(a) 

ratify the challenged decision; 

(b) 

to declare the challenged decision null and void; 

(c) 

to amend the challenged decision; or 

(d) 

to issue a new decision in substitution for the challenged 

decision. 

(6) Where the fine imposed by the Minister pursuant to the 

provisions of this Law is not paid, the Minister may take judicial 

action in order to collect the amount owed as a civil debt due to the 

Republic. 

Jurisdiction of the 

President of the 

32. In contrast to the provisions of section 23 of the Courts Laws, 

the President of the District Court of Nicosia has exclusive 


31 

District Court. 

14 of 1960 

50 of 1962 

14 of 1963 

8 of 1969 

40 of 1970 

58 of 1972 

1 of 1980 

35 of 1982 

29 of 1983 

91 of 1983 

16 of 1984 

51 of 1984 

83 of 1984 

93 of 1984 

18 of 1985 

71 of 1985 

89 of 1985 

96 of 1986 

317 of 1987 

49 of 1988 

64 of 1990 

136 of 1991 

149 of 1991 

237 of 1991 

42(Ι) of 1992 

43(Ι) of 1992 

102(Ι) of 1992 

26(Ι) of 1993 

82(Ι) of 1995 

102(Ι) of 1996 

4(Ι) of 1997 

53(Ι) of 1997 

90(Ι) of 1997 

27(Ι) of 1998 

53(Ι) of 1998 

110(Ι) of 1998 

34(Ι) of 1999 

146(Ι) of 1999 

41(Ι) of 2000 

jurisdiction to try all the offences pursuant to this Law and impose 

any penalty pursuant to this Law or any Regulations issued under 

this Law. 


32 

82(Ι) of 2001 

40(Ι) of 2002 

80(Ι) of 2002 

140(Ι) of 2002. 

Transfer of powers 

and/or duty of the 

Minister to an 

authorised person. 

33.-(1) The Minister may transfer in writing to an authorised by him 

officer the act of any power and/or the execution of any duty that 

this Law or the Regulations grant or devolve, respectively, to the 

Minister. In a case of such transfer, the Minister keeps the power to 

exercise the transferred power and to execute the transferred duty, 

from and during the said transfer. 

(2) An officer, to whom the act of a power or the exercise of a 

duty is granted, pursuant to sub-section (1), shall act the power 

and exercise the duty in accordance to the written directions to him 

by the Minister. 

(3) The Minister may amend and withdraw the transfer he made 

pursuant to sub-section (1), with a written notice to the officer to 

whom the transfer has been made. 

Repeal. 

99(I) of 2004. 

34. The Hydrocarbons (Prospecting, Exploration and Exploitation) 

Law of 2004 is hereby repealed. 

Transitional 

provision. 

35. Without prejudice to the validity of the actions or the 

procedures that were taken or followed based on the regime that 

was in force prior the entry into force of this Law, pending matters 

or procedures that were commenced but not completed at the time 

of its entry into force, will be accomplished, if possible, in 

accordance to the provisions of this Law and the Regulations, 

Orders or notifications issued under it.

THE HYDROCARBONS (PROSPECTING, EXPLORATION ... - PGS

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