TABLE OF CONTENTS

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LEGISLATION

This summary of the Petroleum Legislation of Fiji provides an overview of some of the principal features of the legislation and should not be considered a comprehensive account. Full details of the legislation are available through the Fiji Government Printing and Stationery Department (see Follow-up Information).

The petroleum legislation consists of:

• Petroleum (Exploration and Exploitation) Act, 1978
• Petroleum (Exploration and Exploitation) (Forms and Fees) Regulations, 1979
• Notice of Directions

Revisions to the existing legislation and a new Model Petroleum Agreement are being considered by Government.

The existing legislation covers licences in onshore and offshore areas. The Act sets out definitions, financial provisions, keeping of records and accounts, data provision and confidentiality, rights reserved by Government and various obligations of the company.

Ownership and control of petroleum in Fiji are vested in the State. Petroleum exploration and exploitation rights may be granted only by the Government. The basis of all licence agreements is an agreed work program in a specified licence area. The area available for licensing includes the entire Exclusive Economic Zone (EEZ) of Fiji, some 1.3 million kmē. The main prospective offshore areas have been divided into blocks each of which is 6 minutes of latitude by 6 minutes of longitude, or about 117kmē per block (Figure 26). The maximum area permitted for any one licence is 70 blocks or about 8200kmē, though more than one licence may be held by any one company.

Exploration licences are valid for an initial term of five years after which 50% of the licence area must be relinquished. The company may carry out agreed geological and geophysical surveys, and may drill wells with the consent of the Minister of Lands and Mineral Resources. The licence may then be extended for a further three years after which the remaining licence area must be relinquished.

Following a commercial discovery, a production licence may be granted for a specified number of blocks. Production licences are valid for an initial term of 21 years, with an extension for a further 21-year period. Pipeline licences may be granted for onshore and offshore areas according to agreed technical specifications. These licences are awarded for an initial period of 21 years and may be renewed. All data are held confidential by the government until the licence is relinquished, though summary data of discovery wells may be released after two years.

Government revenue is received from Royalty and Corporation Tax. Royalty is 10 to 12.5% depending on the number of blocks in the production licence. Corporation Tax is typically 37.5% for a Fiji company and 47.5% for a foreign company. In order to encourage development of small fields, proposed revisions to the legislation include a variably royalty, which is determined by the field size.

The fiscal terms are open to negotiation. The Government of Fiji recognises that Fiji is a frontier area and as such is prepared to offer favourable conditions in order to encourage exploration investment.

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CONCLUSIONS

1. The same Tertiary reefal carbonates that produce oil and gas in arc-related basins of Southeast Asia are present in Fiji. The reefs form part of a continuous play trend which includes the oil fields of Irian Jaya, Indonesia and the gas/condensate fields of Papua New Guinea. This play has not been tested by drilling in Fiji.

2. The most prospective areas are offshore Bligh Water Basin and Bad Waters Basin, which have shallow water depths (50-500m) and sediment thicknesses in excess of 4km.

3. Source rocks of Oligocene, Miocene and Pliocene age occur on the main island of Viti Levu and have been drilled in the offshore basins. An offshore oil seep, together with oil and gas shows encountered in offshore wells, provide conclusive evidence that hydrocarbon generation has occurred.

4. Over twenty reefal leads have been identified on seismic data in Late Miocene and Pliocene intervals in Bligh Water and Bad Waters Basins. Limestone turbidite mounds occurring downslope of the reefal mounds constitute a secondary prospective play.

5. There is considerable scope for more reefal and turbidite targets in the deeper Oligocene-Middle Miocene section, which cannot be resolved with the existing seismic data, and in areas where existing seismic coverage is sparse.

6. Estimated potential recoverable reserves for the leads, based on structural closures, are typically 270 million barrels of oil per structure. If lateral seals give rise to combined structural-stratigraphic trapping, recoverable reserves could be more than 1 billion barrels of oil per structure.

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[Section 1][Section 2] [Section 4] [Entire Document (60Kb)]