New legislation calls for 25 percent of extracted oil and gas to remain in Mozambique

12 August 2014

At least 25 percent of oil and gas extracted in Mozambique must be destined for the domestic market, per the proposed Petroleum Law revision approved in general terms by the Mozambican parliament on Monday.

The proposed revision of Law no. 03/2001 of 21 February, submitted to the National Assembly after approval by the Council of Ministers, specifies that the government should ensure that Empresa Nacional de Hidrocarbonetos (ENH), the state’s representatives in oil and gas negotiations, plays a decisive role in promoting and commercialising those products.

The Maputo daily Notícias reported that the Petroleum Law’s proposed revision significantly modifies the document approved in 2001, taking into account the country’s current social, economic and political situation.

The document states that “oil operations are practiced via a concession contract resulting from public tender, simultaneous negotiation or direct negotiation,” and that “the granting of rights to carry out petroleum operations must always respect national interests vis-à-vis defence, navigation, research and preservation of marine resources, existing economic activities and the environment in general.”

Mineral Resources Minister Esperança Bias said during the proposed revision’s presentation that one of the government’s challenges regarding petroleum exploitation is to grant a percentage of generated revenue to the state to benefit communities in project areas, with title-holders urged to acquire local goods and/or services. (macauhub/MZ)