Oil & Gas – Lion Consulting

Petroleum Sector in Tanzania.

Tanzania has in the recent years discovered huge offshore natural gas fields. As we know, Tanzania is a major producer of natural gas and has been exporting natural gas for more than 50 years. Tanzania aims for these discoveries to the socio-economic and political development of the country, and therefore, in the past few years, the Government has developed local content policies aimed at securing job and business opportunities for the citizens in Tanzania. This brief article shall take a look at the regulatory framework governing the Petroleum Sector in Tanzania and the future outlook.

To start it is important to note that the primary laws governing the oil and gas industry are:

  • the Petroleum Act 2015;
  • the Energy and Water Utilities Regulatory Authority Act 2006;
  • the Tanzania Extractive Industries (Transparency and Accountability) Act 2015;
  • the Oil and Gas Revenues Act 2015;
  • the Environmental Management Act 2004;
  • the Tanzania Investment Act 1997;
  • the Income Tax Act RE 2008;
  • the Petroleum (General) Regulations 2011;
  • the National Natural Gas Policy 2013;
  • the Petroleum (Natural Gas Pricing) Regulations 2016; and
  • the Petroleum (Local Content) Regulations 2017.

The overall responsibility for the development of the petroleum sector and granting of the licences falls under the Ministry of Energy.  The Petroleum Upstream Regulatory Authority advises, regulates and monitors the petroleum upstream sub-sector in Mainland Tanzania whilst the Energy and Water Utilities Regulatory Authority monitors the midstream and downstream petroleum and natural gas activities in Tanzania. The Tanzania Petroleum Development Corporation is the National Oil Company of Tanzania and its main activities include:-

  1. participating in petroleum reconnaissance, exploration and development projects;
    1. carrying out specialised operations in the petroleum value chain using subsidiary companies; and
    1. handling the government’s commercial participating interests in the petroleum sub-sector etc

With the signing of the Uganda- Tanzania oil pipeline project by Tanzania, Uganda, the French oil company Total, along with its investment partner in Uganda, the China National Offshore Oil Corporation (CNOOC) to transport crude oil from Western Uganda to the Indian Ocean worth $3.5 billion (€2.9 billion) AND the plans to begin construction on the delated Tanzania plans to begin $30 billion liquefied natural gas project in 2023, following the resumption of talks with companies including Equinor, Lion Consulting expects a more positive outlook for the petroleum sector in Tanzania during the next coming decade.

Based on the challenging regulatory environmental climate surrounding the petroleum sector in Tanzania, Lion Consulting is keen to advise any service provider wishing to engage in the sector or anyone wishing to set up their establishment in Tanzania to seek proper advise beforehand, especially after the introduction of local content regulations in the sector.

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