The activities specific to the oil (crude oil and natural gas) industry can be divided into several categories, depending on their position in the supply chain:
1. upstream sector
includes activities related to exploration, development, production (actual exploitation) and abandonment (work to close a deposit, including environmental restoration and rehabilitation work);
2. midstream sector
consists of storage and transportation;
3. downstream sector
includes subsequent activities such as delivery, refining and distribution finished products to final consumers.
The competent authority for the upstream oil and gas sector is National Agency for Mineral Resources ("ANRM"), which establishes - on the basis of specific regulations - the perimeters that can be offered for exploitation by economic operators. The economic operators participate in the tenders organized by ANRM, and the exploitation of a deposit goes through the phases of exploration, development, exploitation and abandonment (upstream activity).
In the oil industry, the activity offshore is that provided in maritime locations using specialized platforms and equipment, while onshore is that provided at land-based locations, such differentiation is relevant both in terms of the techniques and equipment used.
In view of these differences, offshore activity usually involves higher risks, costs and investments than onshore activity, which have a decisive impact on investment decisions and tax legislation.
