Petroleum exploration in the Dutch Antilles

May 31, 2010 6:49 AM

The discussions in the Dutch Antilles Parliament on the draft National Ordinance on petroleum exploration and production in the sea area around the Leeward Islands (Curaçao and Bonaire) have been postponed until further notice.

The Prime Minister of the Dutch Antilles has agreed upon such postponement as further discussion between the Government of the Dutch Antilles, the island territory of Curaçao and the island territory of Bonaire is necessary. Part of the discussion was the uncertainty regarding the demarcation of the sea boundaries between Curacao and Bonaire. However, in the meantime, the Second Chamber of Parliament of the Netherlands held a plenary session on 15 April 2010, which lead to the adoption of a draft Kingdom Act (covering both The Netherlands and the Netherlands Antilles) on the demarcation of the sea boundaries between Curacao and Bonaire, and between Sint Maarten and Saba. As and when this draft has also been adopted by the First Chamber of the Dutch Parliament, the Kingdom Act will in principle be final and the demarcation of the sea boundaries a fact.

Draft National Ordinance
As stipulated in the draft National Ordinance, the exclusive rights for the exploration and the production of petroleum in the sea area of the Leeward Islands were to be held by a government owned company in the form of a public limited liability corporation (N.V.). According to the draft National Ordinance, 35% of the shares held in this company will be distributed to the Dutch Antilles as a country, while 65% of the shares are to be divided between the island territory of Curaçao and the island territory of Bonaire. Moreover, it is stipulated that 15% of the net-income from the petroleum exploitation and production made by the N.V. is to be paid to the country of Aruba. This 15% net-income payment is based on a Protocol between the Dutch Antilles and Aruba established in 1985, concerning the exploration and production of petroleum and the division of proceeds originated from seabed resources.

Regarding the shares in the N.V. it has not yet been agreed upon how exactly the 65% shares will be divided between the island territories of Curaçao and Bonaire. With the dissolution of the Dutch Antilles ahead, it is also unclear how the 35% shares in the N.V., to be held by the Dutch Antilles, will be divided between the newly established countries. As far as Bonaire, Saba and Sint Eustatius are concerned, these islands will become a direct part of The Netherlands (as special municipalities). As Bonaire will become a direct part of The Netherlands this also means that the territorial sea of Bonaire, as stipulated in the Kingdom Act on the demarcation of the sea boundaries between Curacao and Bonaire, will be an official part of the Dutch Regime. Regarding the shares to be held by the island territory of Bonaire after the dissolution of the Dutch Antilles, it is likely that The Netherlands as legal assessor of the island territory of Bonaire, will therefore obtain such shares of “Bonaire”.

“Mijnraad”
The draft National Ordinance on petroleum exploration and production of the Leeward Islands provides for the appointment of an advisory board, the “Mijnraad” who will be giving advice to the Minister for General Affairs and Foreign Affairs (Prime Minister of the Dutch Antilles) regarding the implementation of this National Ordinance. The “Mijnraad” will also be involved in establishing regulations regarding the safeguarding of nature and the environment with regard to the petroleum exploration and production. One of the several regulations that will be established by National Decree, is the regulation on good health and safety of the persons involved in the petroleum exploration and production.

Aruba
As Aruba will receive 15% of the net-income from the petroleum exploitation and production, the Government of Aruba is entitled to appoint a representative in the “Mijnraad”, and is hereby able to have supervision regarding its share in the net-income from the N.V. This representative will have access to all documents of the N.V. and will have an advisory vote in management and supervisory board meetings of the N.V.

(Source: www.ekvandoorne.com)

Curaçao, 28 May 2010