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What is an oil concession?

Updated: 9/15/2023
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14y ago

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An exclusive license granted by a host country to explore and develop oil. The oil company receives the exclusive right to explore and drill in the specified geographical area and obtains a contractual ownership right to the oil in place. Thus, the host country grants the oil company the rights to all oil production in exchange for payment of bonuses, rentals, royalties, and taxes. Modern concession differ greatly from traditional concessions in that they cover a smaller area, last for a shorter period, and require minimum work obligations by the oil company.

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14y ago
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