Mozambique Extractive Legislation: Final draft of New Oil & Gas Law expected to be signed soon

Mozambique Resource Taxation 2014
Mozambique Resource Taxation 2014

Some key questions around the Gas and Petroleum industry in Mozambique are about to be answered as the final draft of Mozambique’s New Gas and Petroleum Law is expected to be signed into law in the last quarter of 2014 under the current cabinet.

The New Gas and Petroleum Laws implications for resource companies and ancillary industries involved in this sector and country are vast. With little to no public consultations having taken place and the vast majority of negotiations having taken place behind closed doors. The Law will in effect set the stage for the Mozambican economy as the country mobilises to make the largest investment decision in its history.

The New Gas and Petroleum Laws will answer key questions around financing terms, the development of LNG Facilities, the LNG Facilities Agreement, the main terms for consortium companies to develop LNG Facilities, the unitizing of cross boundary facilities, LNG facilities contracts, the prioritization of mega projects, the Final Gas Master plan, Government revenues and pricing formula’s.

The main legislation for the hydrocarbons sector in Mozambique is the Petroleum Law of 21 February 2001 (Law No. 3/2001) (Petroleum Law 2001). It is supplemented by (i) Regulation of Petroleum Operations of 20 August 2004 (Decree No. 24/2004); (ii) Taxation of Petroleum Operations of 27 June 2007 (Law No. 12/2007); and (iii) the Fiscal Incentives Law of 27 June 2007 (Law No. 13/2007).

In 2012, Mozambique published a revised draft of a petroleum law intended to replace the Petroleum Law 2001. This new law was approved by the government in April 2013 and was submitted to the Council of Ministers for ratification. Instituto Nacional de Petroleo (INP) had, until recently, indicated that the new petroleum law would be passed by year-end 2013. Recent indications are that the new petroleum law will now receive parliamentary approval in late 2014. The new petroleum law will come into effect 30 days after its publication in the Government Gazette: the “Boletim da Republica.” It appears that the delay in enacting the new petroleum law will result in a further delay to the proposed 5th Licensing Round for 12 new exploration blocks onshore and offshore Mozambique.

Market Intelligence leaders AIE have organized a 1 day market briefing will take place in Johannesburg on the 22 October 2014, the market briefing will provide much needed insight into the new Gas and Petroleum Law, further details on participating in the market briefing can be accessed via or call: 081 777 0028
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