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Dominican Republic

Published on Thursday 14th June 2018

    • Dominican Republic

      It is a national legislation, in the Dominican Republic there is no distinction between federal and state legislation. The applicable laws are:

      • Law No. 4532-56 on Oil Deposits and Other Fuels;
      • Law No. 4833-58 that modifies Law 4532-56;
      • Law No. 407-72 regulates the sale of gasoline, diesel oil, lubricants and other similar products;
      • Law No. 112-00 Tax Regulations for Hydrocarbons and its Application Rules;
      • Law 520-73 LPG Import and Distribution;
      • Law 1728-48 Installation of Fuel Storage Tanks;
      • Law 57-07 Incentives to Renewable Sources of Energy;
      • Resolution No. 121 Vehicular Natural Gas Regulation;
      • Resolution No. 01-08 Rules of Procedures for Licensing for Marketing Natural Gas;
      • Regulation of LPG National Market;
      • Regulation No. 2119, that Regulates the Use of LPG;
      • Decree No. 736-83 Technical Regulation on Metrological Control of Liquefied Petroleum Gas for Domestic Use;
      • Law No. 146 Mining Law;
      • Law No. 100-13 Ministry of Energy and Mines; and
      • Law No. 142-13, which modifies Law 100-13.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      The oil and gas activities are carry out by both national and international companies, which may or may not have the state as investor.

      In the other hand, the state agency in charge of regulating the sale and distribution of hydrocarbons is the Ministry of Industry and Commerce, for sale and import/export, as well as the Sub-Directorate of Hydrocarbons, a unit of the General Mining Agency, for exploration and exploitation issues.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      Yes. Import, distribution and sale of hydrocarbons are regulated and require special state authorisation. Likewise, the exploration and the exploitation of hydrocarbons require a specific concession from the state.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      There are several state agencies involved in those activities, such as:

      • the Ministry of Industry and Commerce, the Mining Agency (throughout the Sub-Directorate of Hydrocarbons);
      • the Ministry of Environment and Natural Resources (regarding environmental licences for the projects); and
      • the Ministry of Energy and Mines (regarding exploration and exploitation licences for the projects).

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      Yes. The oil and its derivatives, hydrocarbons and other kinds of fuels, belong to the state and may be explored and exploited in benefit of individuals but only under concession contracts granted by the Executive Branch. It must be clarified that the terms and conditions of those concessions have to be in accordance with the national interest. The exploitation rights would be granted for an unlimited time with the surface area to be agreed.

      All matters relating to the exploration in the country with the purpose of discovering oil and other hydrocarbon-substances to the exploitation of deposits that are the same on the surface or in the interior of the earth, whether solid, liquid or gas; to manufacturing and refining of minerals exploited and transported by all means requiring special way, are declared a public utility. In consequence, this will always need a concession from the Executive Branch.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      The oil and gas exploration are order or made by the Ministry of Energy and Mines. Likewise the ministry is entitled to grant the permits for such exploration.

      Thus far, with the new legislation, the method to grant the exploration rights is only through permits.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      The concession for exploration and exploitation can be assigned by way of a public bidding by the State or by a request by the interested party presented to the Ministry of Energy and Mines. As is established in the Law No.4532, only Dominican people and Dominican corporations have the rights to explore, exploit and benefit from the deposits. A concession might be granted, however, to a foreign company and investor as long as the contract subscribed obligates them to submit to Dominican laws and its jurisdiction. A foreign government cannot, under any circumstances, be admitted as beneficiary of a concession, whether directly or through a company in which it participates.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      Similar to the aforementioned, the minimum capital and technical requirements related to the international bidding process are identified in that particular bid.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      As stated in question 7, only Dominican people and Dominican corporations have the rights to explore, exploit and benefit from the deposits. A concession might be granted, however, to a foreign investor as long as the contract subscribed obligates them to submit to Dominican laws and its jurisdiction. A foreign government cannot, under any circumstances, be admitted as beneficiary of a concession, whether directly or through a company in which they participate.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      The Law of Oil Deposits and Other Fuels does not state any restriction for local national companies in the participation in the rights for exploration and exploitation or concessions nor state-owned entities, the only express prohibition is regarding the participation of foreign governments as shareholders or directors of said company.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      Law No. 4532 of Oil Deposits and Other Fuels, and Law No. 4833 that modifies Law 4532, which regulate the exploration and exploitation rights in this field, do not establish if the companies or consortia that are awarded exploration rights receive a priority to exploit the corresponding resources. However, the Mining Agency has established that taking into account the Mining Law and its Regulations, it can be inferred some of the requirements to be taken into consideration for determining if those companies would receive a priority to operate. In consequence, regarding this law, the companies that are awarded exploration rights have a priority to operate and exploit the field. Thus, the companies that are awarded exploration rights in the field of hydrocarbons would receive priority to operate in the area where they received the concession for exploration. The terms of this priority would be established in the concession contract for the exploration.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      When, in the course of the exploration, a holder makes an oil discovery it shall immediately notify the state by letter, specifying in such notice all relevant information related to the discovery. If the holder notifies the state that the discovery has a potential commercial interest, the holder shall prepare with due diligence, a work programme or budget work programme for the evaluation of the discovery. Such work programme or budget work programme evaluation should include a comprehensive assessment of the operations necessary to determine if the discovery is a commercial discovery. When the state approves the working programme, both parts settle the terms of the exploitation. Any benefit on exploration and exploitation of hydrocarbons can be agreed by contracting the state, this also applies for the concessions granted.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      Yes, Law No. 4532 of Oil Deposits and Other Fuels establishes that if is not prohibit by one of the clauses in the contract the holder can transfer the rights for exploration, exploitation to a new entity, in that case this entity will have to comply with the obligations and responsibilities of the contract. Also the holder is entitled to subcontract other entities to perform all or part of the exploration, exploitation and sharing benefits. It is relevant to remark that Law No. 4833, which modifies Law 4532, specifies that any transfer must be notified to the Executive Power before being processed.  

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      The actual legislation does not have any provision regarding recompenses for federal, state or local governments, nevertheless the percentage of benefits to be paid to the Dominican government could be established in the contract subscribed with the beneficiary of the concession.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      In the field of oil and gas there is no such specific regulation yet. In principle, compulsory acquisition of property from third parties does not apply. However, there is a right of passage if a plot of land (ie, the area of the concession) does not have a direct access to main roads.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      Gas exploration and production activities are regulated separately from oil exploration.

      In the other hand, Law No. 57-07 (Incentives to Renewable Sources of Energy) and Law No. 112-00 Tax Regulations for Hydrocarbons and its Application Rules regulates the tax and benefits of tax exceptions applicable to the natural gas production.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      Yes. The Labour Code requires companies to have a minimum percentage of Dominican workers, which depends on the total number of workers registered to the company. Labour matters are regulated by the Labour Code and immigration permits are regulated by the General Directorate of Immigration and the Department of Foreign Investment of the Centre for Import and Export of the Dominican Republic.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      In the Dominican Republic, there is no such particular regulation in the field of oil and gas. However, concerning to vertical integration good commerce practices and anti competitive standards must comply with the Competition Defence Law, No. 42-08.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      These activities can be carried out by physical persons or by corporations (whether a limited liability or a consortia). In addition, joint venture partners are jointly and severally liable for the obligations assumed with regards to the oil and gas industry.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      In the field of oil and gas there is no such specific regulation yet. The parties might agree the possibility of pledged or encumbered the oil and/or gas on the contract regarding to the payment or repayment method.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      Article 5 of Law 4532-56 determines that if is not specificities in the contract agreed with the government, the holder may transfer all the obligations and responsibilities to a third person or entity. Such transfer must be duly and formally notified to the executive power. This implies that the new holder (secured creditor) must comply with all obligations required by law; also it will be subject to any benefit or limitation that might result from such activity.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      Currently our legislation does not regulate the export of oil and gas; however, the Ministry of Industry and Commerce could determine the requirements to be complied with by the companies.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      There is a specific tax on the sale of hydrocarbons, as specified in article 1 of Law 112-00, but the general income tax would apply to the benefits received by the exporting company, unless a tax exemption is established in the concession or by a special law.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      Yes. Due to the nature of oil and gas, its storage and exploration require an environmental licence. This licence is granted by the Ministry of Environment and Natural Resources.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      Yes, the Law and the Regulation of the Hydrocarbons Law, establishes environmental and industrial safety measures for the processing, storage, distribution and exploitation of gas and oil.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      In the case of natural gas, there are tax incentives established in Chapter III of Law 57-07 (Incentives to Renewable Sources of Energy). In the case of oil exploration, the beneficiary would enjoy exoneration or reduction in taxes, as specified in its particular contract, as established in article 56 of Law 4532. We should also consider Law No. 112-00, which regulates the Tax for Hydrocarbons and its Application Rules.

      In general the financing for this type of projects are taken in foreign banks, in consequence, currently, the local banks do not have any financing directed to oil and gas exploration or production.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      The benefits set forth in Law 57-07 (Incentives to Renewable Sources of Energy) and Law No. 112-00 (Tax Regulations for Hydrocarbons and its Application Rules) are applicable to both national and foreign investors, however, we should take into consideration the restrictions established in Law No. 4532-56 (see question 7).

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      No, there is not a specific dispute resolution system to oil and gas industry, therefore are used the systems in ordinary law. Since foreign states are not allowed to be beneficiaries of concessions, no state immunity applies.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      We don’t have any specific regulation for shale gas. Drilling activities would always require an environmental permit as well as a drilling licence.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      Taking into consideration that, article 10 of Law No.66-07, states the Dominican Republic an archipelagic state, establishes that, “The Dominican Republic’s sovereignty extends over the territorial sea, the seabed and subsoil of the seabed and the living and non-living resources in the content as well as air space above the territorial sea.” In the event that ultra-deep-water drilling would be executed, we understand that a drilling licence as well as an environmental licence would be required; notwithstanding, there is not a specific legislation or regulation for this matter.

      Last verified on Thursday 10th May 2018

    • Dominican Republic

      The recent material regarding to hydrocarbon exploration and exploitation is Law No. 100-13 (Ministry of Energy and Mines), which was enacted in July 2013, creating the Ministry of Energy and Mines, amended by Law 142-13.

      Regarding to hydrocarbon exploration and exploitation, this law creates the Vice Ministry of Hydrocarbons and it empowers the ministry for granting exploration permits and exploitation concessions.

      The Ministry of Energy and Mines will work hand in hand with the Ministry of Industry and Commerce and the Ministry of Environment and Natural Resources.

      Last verified on Thursday 10th May 2018

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