The 5th Faroese Licensing Round opened on 11th July 2019 and was run in conjunction with the 32nd UK Licensing Round. Both rounds closed on 12th November 2019.
In preparations for the 5th licensing round Jarðfeingi, together with the Ministry of Foreign Affairs and Trade, secured Parliamentary approval for adjustments in the terms and conditions of licenses and licensing procedures to align them more closely to those which obtain in the UK. Companies can now look at the area in the knowledge that the licensing regimes are similar on both sides of the border. This may be considered of particular relevance in relation to investment decisions in those areas where the geology is also similar on both sides with the possibility of prospects crossing the border.
See the invitation letter from the Minister of Foreign Affairs and Trades on the right >
Map of licensing area for the 5th Round
Complementary data package
Invitation to apply for exploration and production licences
In accordance with section 7(1) of Act No. 31 of 16 March 1998 on Hydrocarbon Activities, the Minister of Foreign Affairs and Trade hereby invites you to apply for licenses for exploration and production of hydrocarbons on the Faroese continental shelf. The area to be offered for licensing and the terms and conditions on which licenses will be granted are defined in Parliamentary Act No. 49 of 7 May 2019 on the Fifth Faroese Licensing Round.
Time frame (The round is closed)
Jarðfeingi shall receive applications for Licenses for Exploration and Production of Hydrocarbons by
12 November 2019 at 2 pm.
The applications shall be submitted to:
Faroe Islands
Or sent to the email address: application5thround@jardfeingi.fo
If you wish to upload large files on a FTP server, please contact jf@jf.fo and we will provide a link.
Application fee:
For the handling of each individual application, an application fee of DKK 20.000 is due upon submission.
The fee shall be paid, free of charge, to:
A copy of the receipt shall be attached to the application
Fiscal Terms
Profitability (Internal rate of return – post normal hydrocarbon income tax)
Company income tax:
27% of Taxable Income
Deductibles:
– Costs
– Investments (30% depreciation/year)
18% Tax on Company Income from other activities
SPECIAL TAX:
Rate-of-Return based (ROR)
– Higher return, higher special tax
Calculation basis: Cash flow
Special Tax Rates:
– ROR < 20% 0% Special Tax
– ROR < 25% 10% Special Tax
– ROR < 30% 25% Special Tax
– ROR > 30% 40% Special Tax
Deductibles:
– Costs and investments
– Company Income Tax
– Not interest
Ring-fence (field basis)
