Tanzania: Oil and gas bill passed

Tanzania’s parliament on Sunday approved a legal and regulatory framework for developing its nascent hydrocarbons industry, after days of contentious debate.

East Africa has become a new oil and gas frontier after a string of discoveries.

Tanzania estimates it has more than 55 trillion cubic feet of natural gas but has yet to make oil discoveries.

Under the terms of the bill, energy companies will pay a 12.5 percent royalty for oil and gas production in onshore or shelf areas and 7.5 percent for offshore output. The state’s share of profit on natural gas production would range from a minimum of 60 to 85 percent, pegged on specific daily gas output.

Members of parliament, mainly from the ruling Chama Cha Mapinduzi (CCM) party, voted overwhelmingly in favor of the 2015 Petroleum Bill. The bill’s opponents said industry players and non governmental organizations should be given more time to scrutinise it.

A copy of the draft legislation seen by reporters sets out royalties and other payments that energy companies will have to pay to the government. Lawmakers are expected to vote on Monday on 2 other related bills – the Oil and Gas Revenue Management and the Tanzania Extractive Industries (Transparency and Accountability) bills.

Source: Reuters