• Nepal Geological Map

    Geologically, Nepal is broadly divided into five major tectonic zones. These zones include Terai, Siwalik, Lesser Himalaya, Higher Himalaya and Trans-Himalayan zones from south to north respectively. read more

  • Exploration Acreage

    The location, number, name and area of all the exploration acreages. Blocks no. 3 and 5 are awarded to Texana Resources Company, Houston, USA. read more

  • Various play (Trap) Types of Nepal

    The principal play recognized in southern Nepal lies in the Surkhet Group with indigenous source, reservoir, and seal, and with a wide variety of potential trap types. read more

  • Key Country Facts

    Land locked Asian nation in the Himalaya mountain range, with India to the east, west and south and the People's Republic of China (Tibet) to the north. read more

  • Geological Setting

    Schematic cross Section through central Nepal read more

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Petroleum Legislation
There are two sets of enabling legislation which govern the negotiation, the conduct of petroleum related operations and the fiscal treatment of these activities. These are :

  1. Nepal Petroleum Act, 2040 (1983)
  2. Petroleum Regulation, 2041 (1985), the Petroleum (First Amendment) Regulation, 2046 (1989), and Petroleum (Second Amendment) Regulation, 2051 (1994),

Nepal Petroleum Act, 2040 (1983)
This is the broad enabling legislation which permits Government to enter into Petroleum Exploration and Production Agreements, with suitable (international) oil companies ("CONTRACTOR"). The Department of Mines and Geology is designated to administer the application for and negotiation of Petroleum Agreements.

Petroleum Regulation, 2041 (1985) with Amendments
These rules which expand on the Nepal Petroleum Act, established the procedure for bidding, evaluation of bids, negotiations and granting of Petroleum Agreements. It specifies the Department of Mines and Geology as the responsible agency for negotiation of Petroleum Agreements and their administration subject to the Petroleum Act

A second amendment contemplates the following:
  1. Contractor may hold more than one block. "No Ring Fencing" of blocks is allowed
  2. the recognition of a "seismic option" as an acceptable bid;
  3. the designation of the Secretary Ministry of Industry as the signatory of the Petroleum Agreement on behalf of Government, and
  4. the delegation of greater operational authority to the Project Chief, Petroleum Exploration Promotion Project (PEPP).

Schedule 2 of the Regulations contains the complete Model Petroleum Agreement, which acts as the basis for bidding, negotiation and administrator of such Agreements

Model Petroleum Agreement
This document acts as the basis for bid preparation, evaluation, negotiation and subsequent administration of the Agreement. The Production Sharing Contract (PSC) is well constructed and fair. It recognizes the relatively high risk of exploration ventures in Nepal and make allowances for this fact in the relaxed and attractive terms. Having the Petroleum Exploration Promotion Project (PEPP)/Department of Mines and Geology (DMG) act as the single focal point for all operational, tax and legal questions is a significant advantage.
Some of the advantages of the PSC are the fact that there is no requirement for signature or production bonuses, no stipulated government participation or back-in-right, a substantial amount of cost oil is given, liberal amortization and loss carry forward provisions are in place and all import duties are waived. Repatriation of profits is allowed as in the export of the contractor's share of petroleum. Repatriation can be done in any foreign currency and conversion is guaranteed at market rates. There is no requirement to take partial payment in Nepali Rupees pegged at an artificially low rate.

Foreign Investment Policy
Nepal has accorded high priority to encourage foreign investment in the country. With economic liberalization policy of the government and attractive fiscal terms available, Nepal is committed for full cooperation to the international oil companies in facilitating petroleum operation in the country.



Latest Notice

01 2016 Aug

Nepal Government has terminated the existing petroleum agreement

Nepal Government has terminated the existing petroleum agreement with oil companies in Nepal. The Petroleum Exploration Promotion Project…

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Contact us

Petroleum Exploration Promotion Project
Ministry of Indsutry
Government of Nepal

Lainchur, Kathmandu,

Tel : 977 (1) 4410605,
977 (1) 4413541

Fax : 977 (1) 4411783

Email : pepp@wlink.com.np