Mozambique Petroleum Law Wins Approval

Monday, August 18, 2014

The amended petroleum law in Mozambique received the stamp of approval from the East African country’s parliament. The revised law is expected to come into effect prior to year end. The passing of the amended petroleum law will pave the way for Mozambique’s newest licensing round, which officials say will take place in the coming months.

The new law requires investors to partner with Mozambique’s state oil firm ENH, according to the country’s mineral resources minister Esperanca Bias.

The new law affects current operators, Anadarko Petroleum and ENI, as under the law 25% of all LNG produced will be dedicated to the domestic market. Anadarko and ENI have discovered substantial reserves offshore the country and are in the process of launching the construction of a LNG facility.

The legislation approved by parliament a “special regime” for the LNG processing chain in Rovuma Basin Areas 1 and 4 where Anadarko and ENI currently operate. This included the construction and operation of LNG facilities and related activities. The “special regime” benefits the two foreign firms as it, according to Bias, grants “certain exemptions in the legislation and establishment of contractual accords for the Rovuma Basin projects.”

The amended law reflects new developments in Mozambique’s petroleum industry according to Bias. The revised law also stipulates that in-country oil and gas firms have to be listed on the Maputo stock exchange.

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