Lease of State Farms for Extraction of Oil and Gas Without Auction and Regardless of Class – Government Adopts New Decree

The Government of Serbia has adopted the new Decree on the conditions, manner and procedure for letting agricultural land owned by the state be used for non-agricultural purposes.

Compared to the previous one, adopted last summer, the most important new feature is that, for oil and gas exploration and exploitation, state-owned agricultural land will be leased without the procedure of public bidding and also regardless of the class of the arable land.

It is proscribed that the subject of use could be non-arable state-owned agricultural land (grazing land, fish ponds, reeds and swamps), or arable state-owned agricultural land (farming land, meadows, gardens, orchards and vineyards) of the sixth, seventh and eighth cadaster classes. – In exceptional cases, when it comes to oil and gas exploration and exploitation, the subject of use could be non-arable state-owned land (fish ponds, reeds and swamps) and arable state-owned agricultural land (farming land, meadows, gardens, orchards and vineyards) – says the new Decree, which was adopted on September 1.

The new regulation says that letting state-owned agricultural land be used is carried out in a public bidding procedure, except in the case of oil and gas.

The decree proscribes that the local self-government group state-owned agricultural land that is planned to be given for use into special public bidding units (cadaster parcels with data on the number, area, class…), but, as said, in the case of oil and gas, the land can be leased even if it is not marked as planned for lease “after it is determined that the conditions in line with this decree are met”.

What remains the same is that, in addition to the extraction of oil and gas, state-owned agricultural land can also be leased for the installation of wind and solar power plants, as well as for the exploration and exploitation of clay, gravel, sand, rock… and for the disposal of slag, ash and waste-rock.

What’s new in this decree compared to the previous one, however, is that this regulation does not envisage the possibility of use of state-owned agricultural land for the carrying out of activities related to the construction of facilities which have been pronounced facilities of importance for Serbia (the setting up of temporary facilities for the accommodation of workers, parking for construction machines etc.).

Also, lease is not possible for activities having to do with the construction of facilities of energy and utility infrastructure, TC and protection from natural disasters, such as can’t be built in another location due to natural and other characteristics.

When it comes to the lease fees, they remain the same.

The initial annual fee for the lease of land for wind and solar projects is equal to five times the amount of the average price of lease per hectare of state-owned agricultural land in the territory of Serbia and thirty times the amount for the exploration and exploitation of mineral resources and disposal of waste-rock.

When it comes to oil and gas, it is said only that “the lease is equal to thirty times the amount of the average price of lease per hectare of state-owned agricultural land in the territory of Serbia”, whereas the word “initial” is left out.

B. P.

The text of the Decree can be viewed here.

Vlada Republike Srbije

Government of Serbia

Decree on the conditions manner and procedure for letting agricultural land owned by the state be used for non agricultural purposes

lease of state owned agricultural land for non agricultural purposes

exploration and exploitation of oil and gas

public bidding

auction

lease of state owned farming land