Communication from the Government of the Republic of Poland concerning Directive 94/22/EC of the European Parliament and of the Council on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons
Date: 2016-06-23
Institutions: Poland
Subjects: Lower Carpathians province, Poland, extraction of oil, gas field, hydrocarbon, mineral prospecting, oilfield, petroleum exploration, public contract








C_2016227EN.01000401.xml










23.6.2016   


EN


Official Journal of the European Union


C 227/4





Communication from the Government of the Republic of Poland concerning Directive 94/22/EC of the European Parliament and of the Council on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons
(2016/C 227/05)

PUBLIC INVITATION TO BID FOR A CONCESSION FOR THE PROSPECTION AND EXPLORATION OF OIL AND NATURAL GAS DEPOSITS AND THE EXTRACTION OF OIL AND NATURAL GAS IN THE ‘BŁAŻOWA’ AREA

SECTION I: LEGAL BASIS








1)


Article 49h(2) of the Geological and Mining Law Act (Journal of Laws (Dziennik Ustaw) 2015, item 196, as amended)












2)


Cabinet Regulation of 28 July 2015 on bidding for concessions for the prospection and exploration of hydrocarbon deposits and the extraction of hydrocarbons, and concessions for the extraction of hydrocarbons (Journal of Laws 2015, item 1171)












3)


Directive 94/22/EC of the European Parliament and of the Council of 30 May 1994 on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons (OJ L 164, 30.6.1994, p. 3; Special edition in Polish: Chapter 6, Volume 2, p. 262)




SECTION II: ENTITY INVITING BIDS





Name: Ministry of the Environment




Postal address: ul. Wawelska 52/54, 00-922 Warsaw, Poland




Tel. +48 223692449, +48 223692447; Fax +48 223692460




Website: www.mos.gov.pl




SECTION III: SUBJECT OF THE PROCEDURE
1)   type of activities for which the concession is to be granted:

Concession for the prospection and exploration of oil and natural gas deposits and the extraction of oil and natural gas in the ‘Błażowa’ area, concession blocks 416 and 417.
2)   area within which the activities are to be conducted:

The boundaries of the area covered by this bidding procedure are defined by lines joining points with the following coordinates in the PL-1992 coordinate system:







Point No


X [PL-1992]


Y [PL-1992]




1


235 252,373 


711 178,197 




2


228 291,890 


722 315,000 




3


235 141,041 


726 795,886 




4


223 925,008 


744 543,900 




5


223 895,850 


743 860,810 




6


222 687,040 


715 541,910 




7


222 646,087 


713 598,330 




8


222 648,190 


713 598,274 




9


222 405,956 


707 295,803 




10


232 285,198 


710 286,462 




The surface area of the vertical projection of the area covered by this bidding procedure is 270,05 km2.
The area covered by the bidding procedure is located in the following districts and municipalities in Podkarpackie Province:






 


Strzyżów district: Niebylec municipality (13,319 % of the area);










 


Rzeszów district: municipalities of Lubenia (14,887 %) and Tyczyn (0,278 %), urban municipality of Błażowa (0,801 %), municipalities of Błażowa (30,059 %) and Hyżne (13,134 %), urban municipality of Dynów (0,374 %), and municipality of Dynów (18,684 %);










 


Brzozów district: municipalities of Domaradz (0,058 %) and Nozdrzec (0,074 %);










 


Przemyśl district: Dubiecko municipality (6,151 %);










 


Przeworsk district: Jawornik municipality (2,181 %).




The aim of the works to be carried out in Palaeozoic, Mesozoic and Cenozoic formations is to prepare documentation and extract oil and natural gas in the area described above.
3)   time limit, not less than 90 days from the date of publication of the notice, and place for the submission of bids:

Bids must be submitted to the headquarters of the Ministry of the Environment no later than 16:00 CET/CEST on the last day of the 91-day period commencing on day following the date of publication of the notice in the Official Journal of the European Union.
4)   detailed bid specifications, including the bid evaluation criteria and a specification of their weighting, ensuring that the conditions referred to in Article 49k of the Geological and Mining Law Act of 9 June 2011 are fulfilled:

Bids may be submitted by entities in respect of which a decision has been issued confirming the positive outcome of a qualification procedure, as provided for in Article 49a(16)(1) and (2) of the Geological and Mining Law Act, independently, or as the operator if several entities are applying jointly for the concession.
Bids received will be evaluated by the bid evaluation committee on the basis of the following criteria:







30 %


:


financial capacities offering an adequate guarantee that activities relating to, respectively, the prospection and exploration of hydrocarbon deposits and the extraction of hydrocarbons, or the extraction of hydrocarbons, will be carried out, and in particular the sources and methods of financing the intended activities, including the share of own funds and external financing;




25 %


:


technical capacities for, respectively, the prospection and exploration of hydrocarbon deposits and the extraction of hydrocarbons, or the extraction of hydrocarbons, and in particular the availability of appropriate technical, organisational, logistical and human resources potential;




20 %


:


scope and scheduling of the geological works, including geological operations, or mining operations proposed;




10 %


:


experience in the prospection and exploration of hydrocarbon deposits or the extraction of hydrocarbons, ensuring safe operation, the protection of human and animal life and health, and environmental protection;




10 %


:


the proposed technology for conducting geological works, including geological operations, or mining operations, using innovative elements developed for this project;




5 %


:


scope and scheduling of the mandatory collection of samples obtained during geological operations, including drill cores.




If, following the evaluation of bids on the basis of the criteria specified above, two or more bids obtain the same score, the amount of the remuneration for the establishment of mining usufruct rights due during the prospection and exploration phase will be used as an additional criterion allowing a final choice to be made between the bids concerned.
5)   minimum scope of geological information:







Concession data


name of area: Błażowa
location: onshore; concession blocks 416 and 417;




Type of deposit


conventional oil and natural gas deposits




Structural levels


Carpathian-Stebnik (flysch)
Paleogene-Miocene
Palaeozoic-Mesozoic
Precambrian




Petroleum systems









I


–


system in the flysch of the Skole Nappe




II


–


autochthonous Miocene system in the Carpathian Foredeep below the Skole Nappe (mainly the northern part of the area)




III


–


Palaeozoic-Mesozoic basement system (mainly the western part of the area)








Source rocks









I


–


Spas shales, Inoceramus beds, Menilite shales




II


–


Upper Badenian and Lower Sarmatian fine-grained clastic rocks




III


–


Ordovician and Silurian fine-grained clastic rocks, Lower Devonian clastic rocks, Middle and Upper Devonian and Lower Carboniferous clastic carbonate rocks, and Middle Jurassic fine-grained clastic rocks








Reservoir rocks









I


–


Kuźmińskie sandstones, Inoceramus beds, Kliwa sandstones




II


–


Upper Badenian and Lower Sarmatian sandstones and sands




III


–


Precambrian sandstones, Middle Devonian, Upper Devonian, Lower Carboniferous and Upper Jurassic carbonate rocks








Seal rocks









I


–


fine-grained clastic flysch formations: Spas shales, Inoceramus beds, Hieroglyphic beds, variegated shales, Menilite beds, Krosno beds




II


–


numerous claystone layers within the autochthonous Miocene succession, Stebnik Unit rocks or the flysch succession of the Skole Unit above the autochthonous Miocene strata




III


–


Ordovician and Silurian for hypothetical Precambrian deposits; Culm, Triassic, Jurassic and autochthonous Miocene rocks and Skole Nappe rock series for Devonian and Carboniferous deposits; autochthonous Miocene rocks and Skole Nappe flysch series for Jurassic deposits








Thickness of overburden









I


–


0-2 500  m




II


–


2 000 -3 800  m




III


–


2 000 -4 500  m








Trap type









I


–


structural or structural-lithological




II


–


structural and stratigraphic




III


–


structural and stratigraphic








Deposits identified in the vicinity (NG – natural gas; O – oil)


Zalesie (NG): discovered in 1982; cumulative production: 1 054,61  million m3; production in 2014: 158,41  million m3; reserves and resources: 2 239,38  million m3 (industrial 333,64  million m3)
Nosówka (O): discovered in 1989; cumulative production: 269 760  tonnes; production in 2014: 6 030  tonnes; reserves and resources: 55 680  tonnes (industrial: none)
Nosówka (NG): discovered in 1999; cumulative production: 38,61  million m3; production in 2014: 3,96  million m3; reserves and resources: 396,49  million m3 (industrial: 168,4  million m3)
Jodłówka (NG): discovered in 1980; cumulative production: 2 058,04  million m3; production in 2014: 7,43  million m3; reserves and resources: 989,37  million m3 (industrial: 78,58  million m3)
Rączyna (NG): discovered in 1983; cumulative production: 231,52  million m3; production in 2014: 0,17  million m3; reserves and resources: 228,62  million m3 (industrial: 120,55  million m3)
Husów-Albigowa-Krasne (NG): discovered in 1961; cumulative production: 4 409,72  million m3; production in 2014: 19,95  million m3, reserves and resources: 613,92  million m3 (industrial: 78,36  million m3)
Kielanówka-Rzeszów (NG): discovered in 1978; cumulative production: 2 431,25  million m3; production in 2014: 61,22  million m3; reserves and resources: 2 301,74  million m3 (industrial: 111,46  million m3)
Kańczuga (NG): discovered in 1959; cumulative production: 675,03  million m3; production in 2014: 5,31  million m3; reserves and resources: 54,35  million m3 (industrial: 8,53  million m3)
Wola Jasienicka (O): discovered in 1962; cumulative production: 71 720  tonnes and 33,67  million m3 of associated gas; production in 2014: 120 tonnes; reserves and resources: none (industrial: 180 tonnes)




Seismic surveys completed (owner)


1977-1986 Błażowa-Bircza 2D (State Treasury)
1982 Rzeszów-Zalesie 2D (State Treasury)
1990 Błażowa-Leszczyny 2D (PGNiG S.A.)
1991 Dębica-Sędziszów-Rzeszów 2D (PGNiG S.A.)
1991-1995 Zalesie-Jodłówka-Skopów 2D + 1997 reprocessing (PGNiG S.A.)
2004 Babica-Niebylec 2D (PGNiG S.A.)
2012 Błażowa-Dynów 2D (PGNiG S.A.)




Benchmark and offset wells (TVD)


benchmark wells: Szklary IG-1 (1 152  m), Dynów 1 (4 281  m), Żyznów 4 (1 400  m), Żyznów 5 (1 405  m),
offset wells: Bachórzec 1 (4 093  m), Babica IG-1 (3 426,1  m), Drohobyczka 1 (4 104,5  m), Drohobyczka 3 (3 900  m), Hadle Szklarskie 1 (3 277  m), Hermanowa 1 (5 092  m), Kielnarowa 1 (3 611,5  m)




6)   commencement date of activities:

The activities covered by the concession will commence within 14 days from the date on which the decision granting the concession becomes final.
7)   conditions for granting the concession, in particular concerning the amount, scope and manner of providing the security referred to in Article 49x(1) of the Geological and Mining Law Act and, where justified, the amount, scope and manner of providing the security referred to in Article 49x(2) of that Act:

The successful bidder is required to provide security covering non-compliance or inadequate compliance with the conditions laid down in the concession and for financing the closure of mine workings will be financed if the concession expires, is withdrawn or becomes invalid. This security is to be provided for the period from the date on which the concession is granted until the end of the prospection and exploration phase. The amount of the security is PLN 100 000. The form and date of its payment are governed by Article 49x(4) and (5) of the Geological and Mining Law Act.
8)   minimum scope of geological works, including geological operations, or mining operations:

The minimum programme of geological works proposed for the prospection and exploration phase comprises:

Stage I duration: 12 months

scope: interpreting and analysing archival geological data

Stage II duration: 12 months

scope: executing 2D seismic surveys (100 km) or drilling one borehole to a maximum depth of 5 000 m with mandatory coring of prospective intervals

Stage III duration: 24 months

scope: drilling one borehole to a maximum depth of 5 000 m with mandatory coring of prospective intervals

Stage IV duration: 12 months

scope: analysing the data obtained
9)   period for which the concession is to be granted:

The concession period is 10 years, including:






—


a prospection and exploration phase of five years' duration, starting from the date on which the concession is granted),










—


an extraction phase, starting from the date on which an investment decision is obtained.




10)   specific conditions for carrying out the activities and for ensuring public safety, public health, environmental protection and rational management of deposits:

Implementation of the concession work programme must not infringe landowners' rights and does not remove the need to comply with other requirements laid down in legislation, in particular the Geological and Mining Law Act, and requirements regarding land use, environmental protection, agricultural land and forests, nature, waters and waste.
11)   model agreement on the establishment of mining usufruct rights:

The model agreement is attached as an annex hereto.
12)   information concerning the amount of remuneration for establishing mining usufruct rights:

The minimum amount of remuneration for establishing mining usufruct rights for the ‘Błażowa’ area during the five-year base period is PLN 57 391,03 (in words: fifty-seven thousand three hundred and ninety-one zlotys and three grosz) per annum. The annual remuneration for establishing mining usufruct rights for the purpose of the prospection and exploration of minerals is indexed to average annual consumer price indices set cumulatively for the period from the conclusion of the agreement until the year preceding the date for payment of the remuneration, as announced by the President of the Central Statistical Office in the Polish Official Gazette (Monitor Polski) (Article 49h(3)(12) of the Geological and Mining Law Act).
13)   information concerning requirements to be met by bids and documents required from bidders:









1.


Bids should specify:






1)


the name (business name) and the registered office of the bidder;










2)


the subject of the bid, together with a description defining the area within which the concession is to be granted and mining usufruct rights are to be established;










3)


the period for which the concession is to be granted, the duration of the prospection and exploration phase and the commencement date of the activities;










4)


the aim, scope and nature of geological works, including geological operations, or mining operations and information about the works to be carried out to achieve the intended objective and the technologies to be used;










5)


a timetable, broken down into years, for geological works, including geological operations, and the scope of such works;










6)


the scope and timetable of the mandatory collection of samples obtained during geological operations, including drill cores, as referred to in Article 82(2)(2) of the Geological and Mining Law Act;










7)


rights held by the bidder to the real property (area) within which the intended activities are to be carried out, or the right for the establishment of which that entity is applying;










8)


a list of areas covered by nature conservation schemes; this requirement does not concern projects for which a decision on environmental conditions is required;










9)


the way in which the adverse environmental impacts of the intended activities are to be combatted;










10)


the scope of the geological information available to the bidder;










11)


experience in the prospection and exploration of hydrocarbon deposits or the extraction of hydrocarbons, ensuring safe operation, the protection of human and animal life and health, and environmental protection;










12)


technical capacities for, respectively, the prospection and exploration of hydrocarbon deposits and the extraction of hydrocarbons, or the extraction of hydrocarbons, and in particular the availability of appropriate technical, organisational, logistical and human resources potential;










13)


financial capacities offering an adequate guarantee that activities relating to, respectively, the prospection and exploration of hydrocarbon deposits and the extraction of hydrocarbons, or the extraction of hydrocarbons, will be carried out, and in particular the sources and methods of financing the intended activities, including the share of own funds and external financing;










14)


the proposed technology for conducting geological works, including geological operations, or mining operations;










15)


the proposed amount of remuneration for establishing mining usufruct rights, this being not less than the amount specified in the notice launching the bidding procedure;










16)


the proposed form of providing security;










17)


if a bid is submitted jointly by several entities, it must additionally specify:






a)


the names (business names) and the registered offices of all the entities submitting the bid;










b)


the operator,










c)


the percentage shares in the costs of geological works, including geological operations, proposed in the cooperation agreement;




















2.


Bids submitted in a bidding procedure should meet the requirements and conditions laid down in the notice launching that bidding procedure.












3.


The following documents are to be enclosed with bids:






1)


evidence of the existence of the circumstances described in the bid, in particular extracts from the relevant registers;










2)


proof that a deposit has been lodged;










3)


a copy of the decision confirming the positive outcome of a qualification procedure, as provided for in Article 49a(16)(1) and (2) of the Geological and Mining Law Act;










4)


graphical annexes prepared in accordance with the requirements relating to mining maps, indicating the country's administrative boundaries;










5)


written undertakings to make technical resources available to the entity taking part in the bidding procedure if other entities' technical resources are used when implementing the concession;










6)


two copies of a geological operations project.
















4.


Bidders may, on their own initiative, provide additional information in their bids or attach additional documents thereto.












5.


Documents submitted by bidders should be originals or certified true copies of originals as provided for in the Code of Administrative Procedure. This requirement does not apply to copies of documents which are to be attached to bids and were created by the concession authority.












6.


Documents drawn up in a foreign language should be submitted together with a translation into Polish by a sworn translator.












7.


Bids are to be submitted in a sealed envelope or a sealed package bearing the name (business name) of the bidder and indicating the subject of the bidding procedure.












8.


Bids submitted after the expiry of the time limit for the submission of bids will be returned to the bidders unopened.




14)   information concerning the manner of lodging a deposit, the amount of the deposit and the payment date:

Bidders are required to lodge a deposit of PLN 1 000 (in words: one thousand zlotys) before the expiry of the time limit for the submission of bids.
SECTION IV: ADMINISTRATIVE INFORMATION
IV.1)   Bid evaluation committee

A bid evaluation committee is appointed by the concession authority for the purpose of conducting the bidding procedure and selecting the most advantageous bid. The composition and rules of procedure of the committee are specified in the Cabinet Regulation of 28 July 2015 on bidding procedures for concessions for the prospection and exploration of hydrocarbon deposits and the extraction of hydrocarbons, and for concessions for the extraction of hydrocarbons (Journal of Laws 2015, item 1171). The bid evaluation committee submits a report on the bidding procedure to the concession authority for approval. Together with bids and all documents related to the bidding procedure, the report is open to other entities submitting bids.
IV.2)   Additional explanations

Within seven days from the date of publication of the notice, an interested entity may request the concession authority to provide explanations concerning the detailed bid specifications. Within seven days from the receipt of the request, the concession authority will publish the explanations in the Biuletyn Informacji Publicznej (Public Information Bulletin), on the entity page of the relevant subordinate office.
IV.3)   Additional information

Full information about the area covered by the bidding procedure has been compiled by the Polish Geological Service in the Pakiet danych geologicznych (Geological Data Pack), which is available on the Ministry of the Environment website (www.mos.gov.pl) and from the





Departament Geologii i Koncesji Geologicznych [Department of Geology and Geological Concessions]




Ministerstwo Środowiska [Ministry of the Environment]




ul. Wawelska 52/54




00-922 Warsaw, Poland




Tel. +48 223692449; Fax +48 223692460






ANNEX

AGREEMENT

establishing mining usufruct rights for the prospection and exploration of oil and natural gas deposits and the extraction of oil and natural gas in the ‘Błażowa’ area

concluded at Warsaw on … 2016 between:
the State Treasury – the Minister for the Environment, for and on behalf of whom Mr Mariusz Orion Jędrysek, State Secretary at the Ministry of the Environment and Chief Geologist of Poland, acts under power of attorney No 5 of 27 January 2016, hereinafter referred to as the ‘State Treasury’
and
XXX, having its registered office at: … (full address) …
hereinafter referred to as the ‘Holder of Mining Usufruct Rights’,
worded as follows:

Section 1.









1.


The State Treasury, as exclusive owner of the substrata of the Earth's crust covering the area within the municipalities of Niebylec, Lubenia, Tyczyn, Hyżne, Dynów, Domaradz, Nozdrzec, Dubiecko and Jawornik, the town and municipality of Błażowa and the town of Dynów in Podkarpackie Province, the boundaries of which are defined by lines joining points (1 to 10) having the following coordinates in the PL-1992 coordinate system:







Item


Coordinates




X


Y




1


235 252,373 


711 178,197 




2


228 291,890 


722 315,000 




3


235 141,041 


726 795,886 




4


223 925,008 


744 543,900 




5


223 895,850 


743 860,810 




6


222 687,040 


715 541,910 




7


222 646,087 


713 598,330 




8


222 648,190 


713 598,274 




9


222 405,956 


707 295,803 




10


232 285,198 


710 286,462 




hereby establishes mining usufruct rights for the Holder of Mining Usufruct Rights in the area described above, limited above by the lower boundary of surface land properties and beneath by the floor of Palaeozoic formations, provided that the Holder of Mining Usufruct Rights obtains a concession for the prospection and exploration of oil and natural gas deposits and the extraction of oil and natural gas in the ‘Błażowa’ area within one year from the date of the agreement establishing the mining usufruct rights.












2.


If the condition of obtaining the concession referred to in paragraph 1 is not met, the obligations arising under the agreement shall expire.












3.


The Holder of Mining Usufruct Rights may carry out activities relating to the prospection and exploration of oil and natural gas deposits and the extraction of oil and natural gas in Cenozoic, Mesozoic and Palaeozoic formations in the rock mass area specified in paragraph 1.












4.


The surface area of the vertical projection of the area described above is 270,05 km2.





Section 2.









1.


The agreement establishing mining usufruct rights shall take effect on the date on which the concession is obtained.












2.


The mining usufruct rights shall be established for a period of 10 years, including five years for the prospection and exploration phase and five years for the extraction phase, subject to the provisions of Section 9.












3.


The mining usufruct rights shall expire on the date on which the concession is terminated.





Section 3.









1.


The mining usufruct rights entitle the Holder of Mining Usufruct Rights to use the area specified in Section 1 on an exclusive basis for the prospection and exploration of oil and natural gas deposits and the extraction of oil and natural gas in the ‘Błażowa’ area, as well as for carrying out all operations and activities necessary for this purpose within that area in accordance with the legislation in force, in particular the Geological and Mining Law Act of 9 June 2011 (Journal of Laws (Dziennik Ustaw) 2015, item 196, as amended), hereinafter referred to as the ‘Geological and Mining Law Act’, and decisions issued pursuant thereto. During the prospection and exploration phase, the Holder of Mining Usufruct Rights may develop the minerals being explored only to the extent necessary to draw up geological and investment documentation.












2.


The Holder of Mining Usufruct Rights undertakes to notify the State Treasury in writing of any changes resulting in a change of name or organisational form, or of registration and identification numbers, in an increase or reduction in share capital, the transfer of the concession to another entity by operation of law, the filing of a bankruptcy petition, the declaration of bankruptcy, the initiation of arrangement proceedings or the initiation of liquidation proceedings. The State Treasury may require that the necessary explanations be provided in such cases. Notification shall take place within 30 days from the date on which the circumstances referred to above occur.





Section 4.

The agreement shall be without prejudice to the rights of third parties, in particular owners of land, and the Holder of Mining Usufruct Rights shall not be exempt from the need to comply with requirements provided for by law, in particular those relating to the prospection and exploration of minerals and the protection and use of environmental resources.

Section 5.

The State Treasury reserves the right to establish within the area referred to in Section 1(1) mining usufruct rights for the purpose of carrying out activities other than those specified in the agreement, in a manner which does not infringe the rights of the Holder of Mining Usufruct Rights.

Section 6.









1.


The Holder of Mining Usufruct Rights shall pay to the State Treasury the following remuneration for the mining usufruct rights in the area specified in Section 1(1) during the five-year prospection and exploration phase for each year of mining usufruct (counted as 12 consecutive months):






a)


PLN … (amount) (in words: … zlotys) for the first year of usufruct, starting from the date on which the agreement took effect, within 30 days from the beginning of that year of mining usufruct,










b)


PLN … (amount) (in words: … zlotys) for the second year of usufruct, starting from the date on which the agreement took effect, within 30 days from the beginning of that year of mining usufruct,










c)


PLN … (amount) (in words: … zlotys) for the third year of usufruct, starting from the date on which the agreement took effect, within 30 days from the beginning of that year of mining usufruct,










d)


PLN … (amount) (in words: … zlotys) for the fourth year of usufruct, starting from the date on which the agreement took effect, within 30 days from the beginning of that year of mining usufruct,










e)


PLN … (amount) (in words: … zlotys) for the fifth year of usufruct, starting from the date on which the agreement took effect, within 30 days from the beginning of that year of mining usufruct




subject to the provisions of paragraph 2.












2.


If the date for payment of the remuneration due for a given year of mining usufruct falls between 1 January and 1 March, the Holder of Mining Usufruct Rights shall pay the remuneration by 1 March. However, if the remuneration is subject to indexation in accordance with paragraphs 3 to 5, the Holder of Mining Usufruct Rights shall pay it no earlier than the date on which the index referred to in paragraph 3 is announced, after taking that index into account.












3.


The remuneration specified in paragraph 1 shall be indexed to average annual consumer price indices set for the period from the conclusion of this agreement until the year preceding the date for payment of the remuneration, as announced by the President of the Central Statistical Office in the Monitor Polski (Official Gazette).












4.


If the date for payment of the remuneration falls in the same calendar year as that in which the agreement was concluded, the remuneration shall not be indexed.












5.


If the agreement was concluded and took effect in the year preceding the year in which the date for payment of the remuneration falls, the remuneration shall not be indexed if the Holder of Mining Usufruct Rights pays it by the end of the calendar year in which the agreement is concluded and takes effect.












6.


If the Holder of Mining Usufruct Rights loses the mining usufruct rights established under the agreement before the time limit specified in Section 2(1) and (2) expires, the Holder of Mining Usufruct Rights shall be required to pay remuneration for the entire year of usufruct in which these rights were lost. If, however, the mining usufruct rights are lost as a result of the concession being withdrawn or for the reasons specified in Section 9(1), (3) or (4), the Holder of Mining Usufruct Rights shall pay remuneration for the entire usufruct period specified in Section 2(1) and (2), taking into account indexation for the year preceding the termination of the agreement. The remuneration shall be paid within 30 days from the date on which the mining usufruct rights were lost. The loss of usufruct rights shall not release the Holder of Mining Usufruct Rights from environmental obligations relating to the subject of the mining usufruct rights, in particular obligations relating to the protection of deposits.












7.


The Holder of Mining Usufruct Rights shall pay the remuneration for the mining usufruct rights into the bank account of the Ministry of the Environment maintained at the Warsaw Branch of the National Bank of Poland, No 07 1010 1010 0006 3522 3100 0000, for the establishment of mining usufruct rights in connection with a concession for the prospection and exploration of oil and natural gas deposits and the extraction of oil and natural gas in the ‘Błażowa’ area.
The date of payment shall be the date of crediting the State Treasury's account.












8.


The remuneration specified in paragraph 1 shall not be subject to tax on goods and services (VAT). If legislation is amended to the effect that the activities which are the subject of this agreement are subject to taxation, the amount of the remuneration shall be increased by the amount of tax due.












9.


The State Treasury shall notify the Holder of Mining Usufruct Rights in writing of changes in the number of the account referred to in paragraph 7.












10.


The Holder of Mining Usufruct Rights shall send copies of proof of payment of the remuneration referred to in paragraph 1 to the State Treasury within seven days from the date of payment of the remuneration for the establishment of the mining usufruct rights.





Section 7.

After the Holder of Mining Usufruct Rights obtains an investment decision specifying the conditions for the extraction of oil and natural gas, the parties shall sign an annex to the agreement within 30 days from the date of that decision, which shall lay down the conditions for the implementation of the agreement during the extraction phase.

Section 8.

The Holder of Mining Usufruct Rights may exercise the mining usufruct rights established in Section 1(1) only after obtaining written consent from the State Treasury.

Section 9.









1.


If the Holder of Mining Usufruct Rights infringes obligations laid down in the agreement, the State Treasury may, subject to the provisions of paragraphs 3 and 4, terminate the agreement with immediate effect, without the Holder of Mining Usufruct Rights being entitled to make any property claims. However, the agreement shall not be terminated if the Holder of Mining Usufruct Rights has infringed obligations under the agreement due to force majeure.












2.


If the agreement is terminated for the reasons specified in paragraph 1, the Holder of Mining Usufruct Rights shall pay to the State Treasury a contractual penalty of 25 % of the remuneration for the entire usufruct period specified in Section 2(1) and (2), subject to indexation for the year preceding the year in which the agreement was terminated.












3.


If the Holder of Mining Usufruct Rights delays payment of the remuneration by more than seven days beyond the deadlines specified in Section 6(1) or (2), the State Treasury shall request the Holder of Mining Usufruct Rights to pay the outstanding remuneration within seven days from the receipt of the request, failing which the agreement will be terminated with immediate effect.












4.


The State Treasury may terminate the agreement in whole or in part by giving 30 days' notice, effective at the end of the calendar month, if the Holder of Mining Usufruct Rights does not inform the State Treasury of the circumstances referred to in Section 3(2) within 30 days from their occurrence.












5.


The Holder of Mining Usufruct Rights shall be bound by the agreement until the date on which the concession is terminated and may not terminate the agreement.












6.


The agreement shall be terminated in writing, failing which the termination shall not be valid.












7.


The parties agree that if the State Treasury terminates the agreement, the remuneration paid for the mining usufruct rights, referred to in Section 6(1), shall not be reimbursed.












8.


The State Treasury reserves the right to seek compensation in excess of the amount of contractual penalties on general terms if the amount of damage incurred by the State Treasury exceeds the contractual penalties.





Section 10.

In the event of force majeure, the parties shall immediately make every effort to agree on a course of action. ‘Force majeure’ shall be understood as an unexpected event which directly affects the Holder of Mining Usufruct Rights, prevents the performance of the activities to which the agreement relates and cannot be predicted or avoided.

Section 11.

The Holder of Mining Usufruct Rights may apply for the extension of the agreement, in whole or in part, and must do so in writing, failing which the application will be invalid.

Section 12.

If the agreement is terminated, the Holder of Mining Usufruct Rights shall not be entitled to make any claims against the State Treasury for an increase in the value of the subject of the mining usufruct rights.

Section 13.

Any disputes arising out of the agreement shall be resolved by the ordinary court having jurisdiction over the seat of the State Treasury.

Section 14.

In matters not governed by the agreement, the provisions of the Geological and Mining Law Act and the Civil Code, in particular those relating to leases, shall apply.

Section 15.

The Holder of Mining Usufruct Rights shall bear the costs of concluding the agreement.

Section 16.

Amendments to the agreement shall be made in writing, failing which they shall not be valid.

Section 17.

The agreement has been drawn up in three identical copies (one copy for the Holder of Mining Usufruct Rights and two copies for the Minister for the Environment).



State Treasury




Holder of Mining Usufruct Rights