Tanzania Petroleum Act 2015

Highlighted in this month's energy briefing is the new Petroleum Act 2015 (PA 2015) related to upstream, midstream and downstream petroleum activities.

This briefing does not include a detailed analysis of the fiscal provisions of PA 2015. Our tax team will provide a further briefing on tax aspects in due course.

BACKGROUND

The energy sector in Tanzania has historically had two key items of legislation, namely:

The Petroleum Exploration and Production Act 1980 (PEPA) The Petroleum Act 2008 (PA 2008) PEPA dealt with upstream petroleum matters, specifically as they relate to 'petroleum' including oil and gas. PA 2008 dealt with downstream petroleum matters.

The Government of Tanzania (GoT) has long intended to update both items of legislation. There was also recognition of a lack of legislation regulating anticipated midstream activities.

The market has been eagerly anticipating the publication of a 'Gas Act' which would regulate midstream activities. Rather than publish a stand-alone Gas Act, GoT has opted to amalgamate updates to PEPA, PA 2008 and the introduction of a Gas Act into one item of new legislation contained in PA 2015.

We include at the schedule to this briefing a table of key changes between PEPA and PA 2015 and PA 2008 and PA 2015.

Update

We prepared an energy briefing in July 2015 focused on The Petroleum Act 2015 Bill Supplement (the Bill) which was placed on the Parliament of Tanzania website on 19th June 2015. That energy briefing was prepared at a time when the Bill was still being debated by Parliament and our comments were subject to further revision of the Bill.

PA 2015 has now been assented to by the President of Tanzania, although the commencement date has to yet be determined. There have been several important changes to the legislation between the Bill and PA 2015. The aim of this briefing is to highlight the important changes made and to provide an overview of the legislation as it now stands.

What are the key changes between the Bill and PA 2015?

Clarification on administration of petroleum activities in Tanzania Mainland and Tanzania Zanzibar

Part I of the Preliminary Provisions of PA 2015 has been amended to provide certain important clarifications related to the administration of petroleum activities in Tanzania Mainland and Tanzania Zanzibar including:

Where upstream, midstream and downstream operations are undertaken in Tanzania Mainland, then such operations shall be governed by the institutions established under PA 2015 Where upstream, midstream and downstream operations are undertaken in Tanzania Zanzibar, then such operations shall be governed by the institutions in accordance with the laws of Tanzania Zanzibar The Governments of...