Petroleum (Exploration and Production) Act

=Introduction= Petroleum exploration and production in Tanzania is governed by the Petroleum (Exploration and Production) Act of 1980 (Cap. 328 R.E 2002). The Act is applicable on both Tanzania Mainland and the Zanzibar archipelago. Act The Act was enacted following the discovery of gas at SongoSongo Island in the 1970s. At that time, Tanzania had made very few gas discoveries compared to the current discoveries of natural gas confirmed to be at 43 trillion cubic feet.

=General Overview of the Act= The Act sets out key features such as the administrative matters in relation to exploration licensing, the regulatory powers of the Minister, the rights and duties of the licensee. On the other hand, it stipulates the rights of persons who are affected or disturbed by the exploration or development processes. It also covers the mechanisms of resolving disputes and stipulates the financial charges in relation to exploration and/or development process.

=Administration= The Act establishes the office of the Commissioner for Petroleum Affairs who is appointed by the President. However, the Commissioner is legally authorised to designate any person to serve as the authorised officer to assist him/her in the enforcement of the Act. The Tanzania Petroleum Development Corporation (TPDC), though not directly stipulated in the Act, has objectives that are directly linked with the administrative functions of the Act. Both the Office of the Commissioner for Petroleum Affairs and that of the TPDC complement the functions of the Minister of Energy and Minerals.

=Licences= The law states that no one is allowed to engage in exploration or development activities in the petroleum industry without holding an appropriate licence. The licences under the Act are granted to individuals who are citizens of Tanzania and/or corporate bodies registered in Tanzania either under the Companies Act or any other law other than Companies Act. The details contained in the exploration and development licences include the date of grant, detailed exploration/development area and the conditions. The Act provides for the surrender, transfer, cancellation and suspension of the licences. =Disputes Resolution= The law has set out a dispute settlement mechanism whereby the Commissioner is vested with the power to determine all disputes arising out or relating to persons engaged in exploration and development operations. The aggrieved party, by the decision or decree of the Commissioner, is availed room to appeal to the High Court of Tanzania within sixty days after the Commissioner of Petroleum Affairs’ decision had been made. =Gaps= The Minister has been vested with powers to make Rules and Regulations to complement the functions of the Act, but very few have are actually in place. As the law was enacted when gas discoveries were in small quantities compared to current huge gas reserves, the natural gas Act will have to be enacted to set clear guidelines in the sector to accommodate the intricate issues associate with growth in the sector.

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