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