Cap. 156 ст. 5AState participation in the activities of prospecting for, exploring for and producing petroleum.

(1) The Government of Malta or any entity in which the

Government of Malta has majority shareholding, shall have the right to participate in the activities of prospection, exploration and production of petroleum in accordance with the licences granted under this Act.

(2) The Government of Malta’s participation in the activities of prospecting for, exploring for and producing petroleum may be managed by the Government itself or by a legal person that the Minister may prescribe by order published in the Gazette.

(3) The rules for payment of considerations referred to in sub-article (2) of article 4, as well as any requirement for Government’s participation, shall be fixed by the Minister in such a way as to ensure that the independence of management of entities is maintained.

(4) Where the grant of a licence is subject to Government’s participation in the activities and where a legal person has been entrusted solely with the management of this participation, or where the Government itself manages the participation, neither the legal person nor the Government shall be prevented from assuming the rights and obligations associated with such participation:

Provided that:

(a) the legal person or the Government shall not be party to information nor exercise any voting rights on decisions regarding sources of procurement for entities;

(b) the legal person or the Government in combination with any entity shall not exercise a majority voting right on other decisions; and

(c) any vote by the Government or the legal person, shall be based exclusively on transparent, objective and non-discriminatory principles and shall not prevent the relevant management decisions of the entity from being based on normal commercial principles.

(5) Notwithstanding the provisions of sub-article (4), the legal person or the Government may oppose a decision by the holders of a licence which would not respect the conditions and requirements specified in the licence, regarding depletion policy and protection of the financial interests of Malta:

Provided that, the option to oppose a decision shall be exercised in a non-discriminatory manner, particularly regarding investment decisions and sources of supply of the holders of the licences, unless they are in breach of national legislation or international law.

(6) Where the Government’s participation in the activities is managed by a legal person, which also holds the licences, then:

(a) the legal person shall keep separate accounts for its commercial role and its role as manager of the Government’s participation; and

(b) the legal person shall ensure that there is no flow of information from the part of the legal person responsible for the management of the Government’s participation to the part of the legal person which holds a licence.

(7) Where the part of the legal person responsible for the management of the Government’s participation engages the part of the legal person which holds a licence as a consultant, the former may make available any information which is necessary for the consultancy work to be carried out. The holders of all licences to which the information relates shall be informed in advance of what information will be given in this way, so that they have sufficient time to raise objections, which shall be submitted to the Minister and the Minister shall decide on the matter after having heard the views of the two parties.

(8) The Minister shall ensure that the monitoring of the entities granted a licence is limited to that necessary to ensure compliance with the conditions, requirements and obligations referred to in sub-article

(2) of article 4 and in particular shall ensure that no holder of a licence is required to provide information on its intended or actual sources of procurement except at the request of the Minister in order to ensure compliance with national and international legislation.