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Mining concession

Gas, oil and coal are one of the most crucial resources in energy economy of each country. The procedure of granting concession for extraction of abovementioned hydrocarbons in Poland is composed of two phases:

  1. qualification procedure
  2. tender.

The procedure is regulated by Polish Mining and Geological Law and is conducted by Ministry of Environmental. The core of this proceedings is detailed assessment the applicant with regard to its ability for conducting exploration and extraction works on hydrocarbons. Also, assessment on protection of state interest is very important. Having regard to the above, one of the key issues in such assessment is the applicant’s experience in similar projects and being under corporate control of third country entity.

Qualification procedure

The interested entity shall fill the motion to Ministry of Environment for conducting qualification assessment. The motion shall contain:

  • detailed data on applicant, including its legal status,
  • capital structure and description of capital connections of applicant,
  • descriptions of financial sources of entity and its structure
  • description of organizational structure of applicant,
  • detailed data on members of managing bodies of the applicant,
  • confirmation of experience in projects on hydrocarbons extraction,
  • signature of legal representative of applicant.

If applicant will obtain positive assessment in qualification procedure, then it is entitled to submit the offer in tender proceedings. The next step is submitting an offer in tender proceedings conducting by Ministry of Environmental.

Tender

The tender proceedings is composed of three phases:

  1. tender
  2. conclusion of cooperation agreement (only if there were few applicants which jointly applied for concession),
  3. cocnession granting phase.

The initiation of tender proceedings is announced in inter alia in Official Journal of European Union. The announcement contains detailed information on the content of concession (type of activity, the area of concession, the scope of geological information, timeframes of concession and other detailed specification of concession as well as the amount of bid bond).

The applicant is entitled to fill motion for clarifications to Ministry  of Environmental regarding the conditions of assessment the offer within 7 days since announcement. All participants of tender shall be treated equally. The concession shall be granted to entity, which provides the best systems of exploration and extraction of particular hydrocarbons included in concession. The final decision is made by the body appointed by Ministry of Environment – tender commission. This body is obliged to assess the offers upon previously specified criteria. The final assessment is prepared in appropriate protocol.

Bid bond

If the applicant withdraw the offer during the tender procedure, the bid bond will not be returned. However, if the offer submitted by applicant will not obtain the highest rate, the concession granting authority is obliged to return all the amount of bid bond within 14 days since receiving the tender protocol by concession granting authority.

Concession

The concession for extraction the hydrocarbons is granted by Ministry of Environment for the period not shorter than 10 years and not longer than 30 years. The concession grants the applicant exclusive right to extract the hydrocarbons in the scope, area and timeframes included in concession. The concession includes also the time of initiation the extraction of hydrocarbons as well as special conditions on planning activity, especially in the scope of environmental protection.

Execution of concession

The execution of concession requires positive investment decision. This decision shall be issued by concession granting authority upon appropriate motion filled by applicant. The motion shall contain inter alia the specification of real estate on which the works shall be performed, applicants rights to this real estate, the term of commencing the works, the description of hydrocarbons deposit and geological conditions of extraction the hydrocarbons within the scope included in concession.

Should you need any legal advice or assistance with regard to concession on extraction coal or other hydrocarbons in Poland, we invite you to contact with our lawyers at info@dudkowiak.com.

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